June '26 Monthly Software: IGV Sees A Retrenchment Following A Strong May

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June '26 Monthly Software: IGV Sees A Retrenchment Following A Strong May

TD SECURITIES (USA) LLC SECTOR NOTE

July 2, 2026

■Software June '26 Monthly Software: IGV Sees A

Retrenchment Following A Strong May

Derrick Wood, CFA THE TD COWEN INSIGHT

415 646 7370

The IGV was down -10.9% in June, giving up roughly half of last month's +21.2% bounce as

derrick.wood@tdsecurities.com

the long Semis / short Software trade resurfaced (-23.5% delta in IGV vs. SOXX). The Infra >

Andrew Sherman, CFA Apps trade also resurfaced, with Security performing the best and SaaS the worst. AI-driven

617 946 3728 fundamentals continue to favor Infra stocks, although Mega Cap Infra names lagged likely due

andrew.sherman@tdsecurities.com

to source of funds dynamics.

Cole Erskine

646 562 1467 What's Trending

cole.erskine@tdsecurities.com

■Coming off of a big rally in May, the IGV saw material digestion in June, giving up slightly

Jared Jungjohann over half of Mays gains. ORCL/ADBE results reinforced YTD trends of accelerating growth

646 562 1416 in Infra Software and decelerating growth in Apps Software, helping to resurface the Infra

jared.jungjohann@tdsecurities.com > Apps positioning. At the same time, the long Semis / short Software trade seemed to

recapture momentum, weighing on the broader Software group and reflected by the -23.5%

delta in IGV vs. SOXX (the 3rd largest delta in LTM).

■Oscillating AI sentiment. Some recent positive developments for Software include 1)

tokenmaxxing reversal and the emerging role of Software in providing guardrails/

governance/optimization for AI model consumption; & 2) AI coding tools becoming more

widely used in trad'l Software platforms like SNOW & Databricks. On the flip side, 1) SaaS