A two-week ceasefire in Iran has offered the market a temporary reprieve ahead of the earnings cycle.
Strategists say the volatility is far from over. But AI remains a powerful catalyst, despite sectors like software getting hammered. The iShares Expanded Tech-Software Sector ETF (IGV) has plunged 12% over the past month, while the S&P 500 (^GSPC) has managed to rise slightly.
“There’s clearly a bit of an overreaction,” Ben Emons, founder of FedWatch, told Yahoo Finance. “I’d say some of the software stocks become interesting plays, maybe, in addition to utility-driven financials.”
The uncertainty is visible in names like Palantir Technologies (PLTR), whose shares slipped 14% this past week. The software defense contractor has come under fire from “Big Short” investor Michael Burry, while garnering a bold-faced endorsement from President Trump.
Despite the noise, Mark Gibbens, chief investment officer of Gibbens Capital, told Yahoo Finance it’s “time to jump in.” He said the market has thrown Palantir “out with the bathwater.”
Skepticism toward the recent software sell-off has extended to Palo Alto Networks (PANW), which has seen shares drop over 8% this year.
Gradient Investments senior portfolio manager Keith Gangl told Yahoo Finance that security software remains a top priority for IT departments regardless of the macro backdrop. He called this a rare opportunity to buy a high-quality name “that’s on sale compared to where it normally trades.”
“I think Palo Alto is a winner there,” Gangl said.
Oracle (ORCL) has faced similar pressure, falling about 4% this past week. The company recently said it would slash up to 30,000 jobs while ramping up AI infrastructure spending. Despite shares dropping 30% year to date, its valuation remains more reasonable than megacap peers.
Pivotal Advisors CEO Tiffany McGhee contends that Oracle’s strong cash flow, pricing power, and enterprise contracts make it a standout.
“Oracle is one that we like,” she told Yahoo Finance, noting its role as a “core enterprise software cloud infrastructure company.” The company is becoming a “key player in the AI infrastructure and cloud demand [space].”
While software struggles for footing, a different valuation story is taking hold for Nvidia (NVDA). The face of the AI trade has largely gone “almost nowhere,” Gibbens said. The stock has slid from recent highs to trade at just 21 times forward earnings. Per Gibbens, the most dominant semiconductor plays are “still a good place to be.”
