Time to buy software stocks: Analyst

Jefferies Senior Analyst Brent Thill joins Market Domination Overtime to discuss the state of the software sector and its outlook as the market heads into the second half of the year.

“I’m more excited because everyone hates software right now,” Thill says. He notes that the first half of the year has been tough for the sector, and investor sentiment is quite low given its recent performance: “I think right now, everyone is so negative and I haven’t seen that in my career. so much time. As long as we’ve done that and how negative it is, so when you think about the feel and the setup, it feels really bad.”

However, Thill still has hope: “As the saying goes, invest with fear and sell with greed. And right now we have a lot of fear. So I think it’s time. IGV (IGV) has slowly recovered. against the half-breeds”. He believes that if software companies take a little risk, along with a resurgence of mergers and acquisitions should Donald Trump be elected, the sector could see some growth. “I’m actually moderately more constructive because I think a lot of the bad news is already in these stocks,” he explains.

For more expert insights and the latest market action, click here to watch this full episode of Market Domination Overtime.

This post was written by Melanie Riehl

Video transcription

Brent, I also want to get your general thoughts on the software sector and what you see it’s had in the back half.

How optimistic are you, Brent?

I asked and I had another financial analyst on the show earlier who was relatively more, more cautious about the software.

Where are you?

I’m more excited because everyone hates software now.

I said that II, I feel like I’m changing the oil underneath without a light.

And you know, it was a tough and difficult half a year for me.

So I think the feeling is awful.

Most of our large institutional investors are software underweights.

Everyone is on semi-AI hardware infrastructure.

So I’m actually going to take the other side of that, which is, I think everybody is so negative right now, and I haven’t seen that in my career as long as I’ve been doing this and how negative it is. It is.

The story continues

So when you think about the sentiment and the setup, uh it just feels, it feels very bad and as they say invest in uh with uh with fear and, and sell greedily and now we have a lot of fear.

So, I think the time has come.

Uh, the IGV has slowly made its way back against the semis.

Uh, again, no, I don’t expect a breakout, but if, if companies maintain or even de-risk a little bit, the guy starts looking at 25 multiples, you start seeing more M and A Trump gets in office and M and A return.

I mean, my opinion is more constructive for the software considering how negative everyone is.

I can’t imagine it getting any more negative than if companies have to cut the numbers by about 20%.

I don’t see it, but I just had sales force on the weekday.

A number of companies have reduced the numbers.

So I’m actually, I’m moderately more constructive because I think a lot of the bad news is already in stocks.