Software ETFs Post Seven Consecutive Weeks of Gains, Best Month in 25 Years
Miles Bennett
The iShares Expanded Tech-Software ETF (IGV) has rallied for seven consecutive weeks with a cumulative gain of 36% — its best single month since 2001 — while short interest stays stubbornly high.
How strong is this rally, exactly?
IGV has risen for seven straight weeks, gaining a cumulative 36%, and added another ~1% after hours.
The ETF reclaimed its 200-day moving average and the 100-point round number — the first close above the 200-day since early January.
In plain terms = everything that was broken on the chart has been repaired in a single stretch.
Best month in 25 years — why software?
Per All Star Charts, software's May gain is the strongest single month since October 2001.
Over the past 10 trading sessions, software stocks have outpaced semiconductors.
This means → the market's momentum money is rotating from hardware into software, at least in the short term.
Where is the money coming from?
Per Koyfin, IGV has drawn over $1.5 billion in net inflows in May so far — the third-largest monthly intake since November 2025.
It is on track for a fourth consecutive month of net inflows, the longest streak since the post-COVID recovery in 2020.
This reflects a sustained, multi-month capital shift — not a one-day spike.
Shorts are still at the table — what comes next?
Morgan Stanley's securities-lending desk notes that software short exposure has eased from its peak but remains near the 87th percentile over the past 12 months.
Buying has concentrated in cybersecurity and infrastructure software, not across the board.
The desk judges the "bounce trade" phase is over and expects renewed short pressure later this year — but says it is too early to act on that now.
Put simply = bulls are charging, shorts haven't left — both sides are still at the table. Near-term momentum is strong, but the medium-term disagreement hasn't resolved.
Content is for reference only, not financial advice.