Software stocks experienced a record-breaking August rally while semiconductor stocks faced a late-month decline.
Software stocks achieved their strongest August performance since 1990, with the broader S&P software index gaining approximately 14%. During this period, the iShares Expanded Tech-Software Sector ETF surged over 16%, while the iShares Semiconductor ETF finished the month with a gain of only 1%.
Show the rest of this summary
In the first half of August, semiconductor stocks and physical AI infrastructure components, such as electrical equipment and networking gear, saw significant gains. However, in the final two weeks of the month, 58 of 61 semiconductor stocks in a Yahoo Finance basket fell, removing roughly $1.1 trillion from the group's market value. Major software companies saw significant growth, including Atlassian, which nearly doubled in value, and Palantir, which jumped more than 50%. Salesforce also saw its best month since 2005, surging over 40%. Other notable gains included ServiceNow, which rose over 30%, and CrowdStrike, which rose more than 20%. Historical data shows that software stocks typically hold up through mid-September, while semiconductors tend to fall earlier. September is historically the weakest month for the S&P 500.