---
title: "Software funds fall 2.9% as application names are marked down"
url: "https://etf.net/news/software-funds-fall-2-9-as-application-names-are-marked-down-2026-09-12"
published_at: "2026-09-12T14:40:43.868Z"
updated_at: "2026-09-12T14:40:43.868Z"
byline: "ETF.net Research"
---

# Software funds fall 2.9% as application names are marked down

iShares software ETF IGV dropped 2.9% in the week ended September 11. Oracle grew cloud-infrastructure revenue 121%, and Adobe set fourth-quarter sales at $6.80 billion to $6.85 billion.

By ETF.net Research. Published Sep 12, 2026.

State Street’s $120 billion U.S. technology sector fund XLK returned **0.2%** through Friday, September 11. The software fund that holds Oracle, Adobe, Salesforce, and Palantir, iShares Expanded Tech-Software Sector ETF IGV, fell **2.9%**. Both Oracle and Adobe beat quarterly estimates. Both stocks still lost **5.4%**.

That was the week inside “tech”: infrastructure demand was loud, application software was cheaper, and Nvidia’s **5.2%** decline did not define the sector fund because Apple, AMD, and Intel offset the weight.

## Broad tech holds; software does not

The four-session week after Labor Day left cap-weighted technology almost unchanged and the Nasdaq-100, via Invesco QQQ Trust QQQ, down **0.6%**. The S&P 500, via SPY, fell **0.8%**. Inside the sector the books diverged.

Chart: IGV **fell** through the week as XLK held

Equal-weight technology and the capped semiconductor fund outperformed the Nvidia-heavy versions. Cloud software, even in an equal-weight sleeve, fell more than the concentrated software fund.

Table: Exposure, Fund, Week, YTD

Nvidia’s decline in XLK was nearly cancelled by Apple and AMD. Vanguard Information Technology ETF VGT, which holds more of Nvidia, finished down **0.2%**.

In IGV, Palantir, Oracle, Salesforce, and ServiceNow, **28%** of the fund together, subtracted **1.3 percentage points**, about **46%** of the decline. The rest of the book fell too. WisdomTree Cloud Computing Fund WCLD, whose largest position is about **2%**, dropped **4.8%**. The software selloff was broad, not a four-name accident.

IGV is down **3.9%** year to date. XLK is up **30.7%**. The year’s technology gain is still an infrastructure story. This week did not rewrite that. It invoiced the application layer.

## Oracle’s 121% growth and Adobe’s dip

Oracle reported fiscal first-quarter results after the close on Thursday. Non-GAAP earnings were **$1.92** a share against a **$1.74** estimate; revenue was **$19.3 billion**. Cloud infrastructure revenue rose **121%** to **$7.4 billion**. Remaining performance obligations reached **$664 billion** after more than **$30 billion** of additional AI-cloud contracts. The company said it had delivered more than 300,000 GPUs since the end of the prior quarter.

Cloud applications, the older software business, grew **10%** to **$4.2 billion**. Capital spending was **$28.5 billion**. Free cash flow was negative **$5.4 billion**.

The stock had already fallen **5.4%** on Thursday alone, into the print. On Friday it traded as high as **$165.99**, then closed at **$150.15**, a **9.5%** fade from the session high. Oracle is **6.2%** of IGV and subtracted **0.33 percentage points** from that fund.

Adobe, reporting the same evening, posted **$6.76 billion** of third-quarter revenue, up **13%**, and non-GAAP earnings of **$6.13** a share against **$6.08**. AI-first annual recurring revenue grew more than **150%**. The company said it had reached 1 billion monthly active users, kept a **10.2%** ending ARR growth target, and raised fiscal 2026 non-GAAP earnings guidance to **$24.45** to **$24.50**. Fourth-quarter revenue was set at **$6.80 billion** to **$6.85 billion**.

Most of Adobe’s weekly decline happened before that report. Shares fell from **$266.51** on September 4 to **$248.83** on Thursday. They traded as low as **$241.52** on Friday and closed at **$252.23**, up **1.4%** on the day, still down **5.4%** for the week and **28%** year to date. It is **3.5%** of IGV.

On September 11, Gil Luria, D.A. Davidson’s head of technology research, said the dip was justified: in-line results do nothing to dismantle an “AI loser” perception, and a months-long chief-executive transition added pressure. He rates the shares Buy with a **$250** target, just under Friday’s close.

ServiceNow, Salesforce, Palantir, and Intuit did not report this week. Software was being marked down before anyone published a 10-Q. Luria was speaking about Adobe; the rest of the book already traded as if that view applied.

The same week, Meta launched Muse, a consumer AI agent with a free tier and paid plans at **$20** and **$100** a month. Meta shares jumped **6.6%** on Wednesday.

Chart: Meta **jumped**; the software book was marked down

## Nvidia’s weight splits the semiconductor funds

VanEck Semiconductor ETF SMH rose **0.3%**. Nvidia, **22.4%** of the fund, subtracted **1.2 percentage points**. AMD, Qualcomm, and Intel added **1.1 percentage points** combined. iShares Semiconductor ETF SOXX, which caps its largest names, holds Nvidia at **9.2%** and rose **1.4%**. Same industry, different concentration, different week.

Qualcomm announced on Tuesday a multi-generation collaboration with Amazon to build customized silicon for AI data centers and to work on optical connectivity up to 1.6T. The stock rose **3.2%** that session and **7.8%** for the week. It is **4.2%** of SMH. AMD gained **8.1%**, Intel **7.5%**. Micron, **5.6%** of the semiconductor fund, fell **4.1%**.

Apple unveiled its first foldable iPhone, the Duo, on Wednesday. Shares slipped **0.3%** that session, then rose **3.6%** on Thursday and **1.7%** on Friday, finishing the week up **3.8%**, XLK’s largest positive contribution.

On Friday, XLK rose **1.3%**. The bounce did not repair the software fund. IGV added **0.3%**.

## What the week’s prices assume

Friday’s closes treat AI infrastructure demand as settled. Oracle can grow that business **121%**, book more than **$30 billion** of new contracts, and still be marked as a cash-conversion problem at **$150.15**. They treat **13%** software growth and a **10.2%** ARR target as insufficient to re-rate the shares. And they treat Nvidia as a holding that can fall **5.2%** without taking the sector fund with it, provided Apple and a handful of other chipmakers move the other way.

Holders of XLK lived that last assumption. Holders of IGV lived the first two. The year-to-date gap between those funds, **30.7%** up versus **3.9%** down, is the same bargain, just drawn over nine months.

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