Artificial intelligence (AI) has been the biggest investment theme over the past couple of years, as it rapidly transforms numerous industries. Investors are eager to identify the winners of the ongoing AI gold rush.
Semiconductor stocks have been among the most obvious beneficiaries. Shares of Nvidia NVDA, the designer of the most sophisticated AI GPUs, have risen over 700% in the past two years. Now, many investors are searching for the next big opportunities in other areas.
The software sector appears poised to benefit from an explosion of AI use cases, driven by the widespread adoption of generative AI technology.
“The AI revolution is accelerating, and now it’s the software sector that will benefit from the use-case phase of AI, set to be primetime in 2025,” said Wedbush analyst Dan Ives.
While many software stocks have surged in recent weeks, the rally in semiconductor stocks has stalled. In addition to stretched valuations, semiconductor stocks face potential headwinds from tariffs and trade tensions under the new administration.
Shares of Palantir Technologies PLTR jumped to a record high after the company reported better-than-expected results and raised its outlook, citing strong demand in the U.S. for its AI software.
Shares of Snowflake SNOW surged over 32% in its best trading day ever after the data analytics software maker reported excellent results.
To learn more about the iShares Expanded Tech-Software Sector ETF IGV and the SPDR S&P Software & Services ETF XSW, please watch the short video above.
Adobe ADBE, Microsoft MSFT, Oracle ORCL, AppLovin APP and MicroStrategy MSTR are among the top holdings in these ETFs.
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NVIDIA Corporation (NVDA) : Free Stock Analysis Report
Oracle Corporation (ORCL) : Free Stock Analysis Report
Adobe Inc. (ADBE) : Free Stock Analysis Report
AppLovin Corporation (APP) : Free Stock Analysis Report
MicroStrategy Incorporated (MSTR) : Free Stock Analysis Report
Snowflake Inc. (SNOW) : Free Stock Analysis Report
SPDR S&P Software & Services ETF (XSW): ETF Research Reports
iShares Expanded Tech-Software Sector ETF (IGV): ETF Research Reports
Palantir Technologies Inc. (PLTR) : Free Stock Analysis Report
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