Just two months ago, software stocks were one of the market’s biggest disappointments. Today, they are among its strongest performers.
Speaking on CNBC’s Options Action, options reporter Oliver Renick highlighted the dramatic reversal underway across the software sector, noting that the group has gone from a steep early-year selloff to positive returns for 2026. “Software is officially back now positive on the year after a near 30% drop in the first four months,” Renick said. “The IGV ETF is now up 40% off its April lows.”
The next major test for the software sector arrives at 4:05 PM ET on Wednesday, June 3, when CrowdStrike (NASDAQ:CRWD | CRWD Price Prediction), one of the sector’s most closely watched companies, reports fiscal first-quarter 2027 results.
Software’s Recovery Has Been Remarkable
The iShares Expanded Tech-Software Sector ETF (NASDAQ:IGV) tracks the S&P North American Expanded Technology Software Index and has become one of the most widely followed software-sector benchmarks. From the April 10 reference low, IGV is up 44.23% through Monday’s close at $107.70, including a 24.32% gain in the past month alone.
Cybersecurity has done even more of the heavy lifting. The Amplify Cybersecurity ETF (NYSEARCA:HACK) is up 30.65% year to date and 29.98% in just the past month. The rally suggests investors have become increasingly comfortable with the idea that enterprise software spending remains healthy despite concerns earlier this year about economic uncertainty and AI-related disruptions.
CrowdStrike Could Add to the Rally
No company better represents the sector’s recovery than CrowdStrike. Renick noted that “Crowdstrike has casually doubled its market value since April 10th, and options are priced for a 9% move in the stock, which has rallied after three of the past four reports.”
CRWD is up 106.37% since April 10, closing Monday at $782.17 after a 7% single-day pop. Going into earnings, management’s last quarterly update flagged a record Q1 pipeline, with Q1 guidance for revenue of $1.360 to $1.364 billion, non-GAAP EPS of $1.06 to $1.07, and ending ARR of $5,501.8 to $5,503.8 million. CEO George Kurtz set the tone in March, calling CrowdStrike “mission-critical infrastructure, securing AI across every layer from GPU to agent to prompt” in the company’s Q4 FY26 earnings release.
What the Options Flow Says
Perhaps the most interesting signal heading into earnings comes from the options market. According to Renick, “Traders aren’t waiting until Wednesday to chase this big tech comeback. There is a ton of bullish flow across the group. Calls outpace puts 5 to 1 by volume in IGV this morning.” He added that “Options ratios and software continue to skew more positive than in the semiconductor group, which, by the way, is still doing great.”
Prediction markets are telling a similar story. Polymarket assigns a 93% probability that CRWD beats quarterly earnings and a 95% probability that Q1 net new ARR clears the $250 million threshold.
What Can Go Wrong
The challenge for CrowdStrike is that optimism is already reflected in the stock price. If CRWD disappoints on net new ARR, full-year guidance, or the pace of Falcon Flex consolidation, the unwind can be every bit as fast as the climb.
Wall Street’s own consensus price target sits at $555.92, well below the current quote, even with 42 buy ratings, 12 holds, and 0 sells. The software comeback is real and broad, and CrowdStrike’s earnings on Wednesday afternoon will reveal whether the confidence up to this point is justified.
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