IGV, the iShares Expanded Tech-Software Sector ETF, rose 1.6% in premarket trading after earnings from two major holdings sharply beat expectations. The move mattered because Salesforce and CrowdStrike together account for 12.24% of the fund, making their post-earnings rallies a direct driver of ETF performance.
The bounce comes at a critical moment for software stocks. Despite managing $14.02 billion in assets, IGV has posted a negative 4.01% total return over the past 12 months, badly trailing the S&P 500’s 18.44% gain while investors pulled roughly $1.5 billion from the fund over the past three months.
For investors watching IGV and the broader software sector, the key question is whether strong fundamentals can finally outweigh concerns about AI-driven disruption, rich valuations, and concentrated portfolio risk.
Key Facts
- IGV held $14.02 billion in assets across 111 holdings and closed at $102.45 on August 25, with a 52-week range of $73.93 to $117.99.
- Salesforce, a 5.72% holding, rose 11.25% in premarket after reporting adjusted EPS of $5.90 versus a $3.27 consensus estimate.
- CrowdStrike, a 6.52% holding, gained 10.49% after hours after reporting $1.47 billion in revenue versus $1.44 billion expected.
- The top 10 holdings represent 62.23% of IGV, while the fund’s holdings-weighted price-to-earnings ratio stands at 59.06.
- IGV recorded net outflows of $186.22 million over five days, $819.52 million over one month, and $1.5 billion over three months.
IGV software ETF
The immediate catalyst for IGV’s move was straightforward portfolio math. Salesforce and CrowdStrike are the fund’s fourth- and fifth-largest positions, and their combined weighting means double-digit gains in both stocks can materially move net asset value in a single session. Based on their weights and price reaction, the two holdings contributed about 1.32 percentage points of IGV’s 1.6% premarket gain.
That matters because software has been one of the market’s most contested technology segments in 2026. Investors have rewarded semiconductor and infrastructure names tied to AI buildouts, while many application software companies have been penalized on the view that generative AI could erode traditional seat-based software models. Salesforce’s quarter challenged that thesis directly, with revenue of $11.35 billion, raised full-year guidance of $46.1 billion to $46.4 billion, and management commentary pointing to strong order growth and low attrition.
CrowdStrike delivered a similar message for cybersecurity. The company posted 26% year-over-year revenue growth, lifted fiscal 2027 guidance to $5.99 billion to $6.01 billion, and extended a string of earnings beats. Because cybersecurity names including CrowdStrike, Palo Alto Networks, and Fortinet make up 19.43% of IGV, the earnings read-through extends beyond a single stock and into a large sub-sector of the ETF.
Two holdings produced most of the rally, but the bigger story is whether strong software earnings can reverse a market narrative that has favored AI hardware over AI applications.
Why concentration is central to the story
IGV is often discussed as a broad software vehicle, but its structure is far more concentrated than the headline number of 111 holdings suggests. The top 10 positions account for 62.23% of assets, and several individual holdings carry weights above 5%. In practice, the ETF behaves more like a concentrated basket of large software names with a long tail of smaller positions.
That concentration cuts both ways. It amplified the benefit from Salesforce and CrowdStrike, but it also helps explain the fund’s weak trailing performance. Palantir, currently the largest holding at 10.58%, is down about 40% year to date. A decline of that size in a double-digit portfolio weight can have an outsized impact on returns, especially in a fund with limited exposure outside software.
Implications for Investors
For investors, IGV now presents a clearer split between improving company-level fundamentals and still-cautious capital flows. The earnings results from Salesforce and CrowdStrike suggest that parts of the software industry are holding up better than the market feared, particularly in enterprise applications and cybersecurity. If more large holdings confirm stable demand, the sector could begin to recover some of its valuation damage.
At the same time, the risks remain substantial. A weighted P/E of 59.06 leaves little room for disappointment, and software remains one of the more rate-sensitive segments of the equity market. Net redemptions of $1.5 billion over three months also indicate that allocators have not yet fully bought back into the group. Rising prices without improving fund flows can be fragile if sentiment shifts again.
Investors should also watch the internal balance of the portfolio. The fund’s biggest positions include Palantir at 10.58%, Palo Alto Networks at 9.69%, Microsoft at 9.31%, CrowdStrike at 6.52%, and Salesforce at 5.72%. Moves in a handful of names can dominate returns, which makes IGV suitable for investors seeking targeted software exposure but less ideal for those expecting broad diversification across technology.
The next test for IGV is whether earnings strength broadens beyond two stocks and starts to slow or reverse the outflow trend. If that happens, the software rebound could gain traction; if not, the sector may remain stuck between strong quarterly numbers and persistent skepticism.