Over the last year, the iShares Semiconductor ETF ([SOXX]) has posted a gain of 137.81% while the iShares North American Tech-Software ETF ([IGV]) is down 10.41%.

There’s been plenty of talk about semiconductor and software stocks over the past few months. It’s been a feast or famine market for the two subsectors. Over the last year, the iShares Semiconductor ETF (SOXX) has posted a gain of 137.81% while the iShares North American Tech-Software ETF (IGV) is down 10.41%. Needless to say, that’s a pretty wide spread! Historically, it had been difficult for either semis or software to gain an upper hand on a relative strength basis. There was plenty of back and forth before AI became a dominant narrative. Conceptually this makes sense, software needs hardware to run on and demand for one impacted the demand for the other. We can see this on the SOXX vs IGV relative strength chart below where it chopped around until 2021 when it started to break out. Software then began to put up a fight over the next few years, but semis started to pick up steam again in the second half of 2025. Since then, they have not looked back on a relative basis.

With such an explosive break of a traditionally back-and-forth relationship, could we see some reversion back to the mean? Most definitely, but there are little signs that software is ready to get back up and fight. IGV has a poor 1.61 fund score but has rallied recently to reverse back into a column of Xs on its market RS chart. When looking at its 2-point trend chart, IGV found support in the mid-70s, which has been an important area over the last few years. On the other hand, IGV trades firmly in a negative trend with plenty of resistance near its old highs.  Software may be able to catch up with semis on a short-term basis, but there is not any meaningful evidence that it will be able to do much more than that. IGV’s two largest holdings, Microsoft (MSFT) and Palantir (PLTR), have earnings over the next week. They may be able to quell the market’s worries about software in an AI age. However, until IGV or the broader software sector can show meaningful improvement, it is one to avoid for the time being.