Observed Signal · Apr 27, 2026 · Earnings Report · Source: CNBC Investing · Impact: 4/5 · Sentiment: Neutral
Microsoft Breakout Could Signal Software Stocks Bottom
NYSE insider Jay Woods said Microsoft’s upcoming earnings and a technical move above key moving averages could mark a turning point for software stocks. Woods, chief market strategist at Freedom Capital Markets, highlighted the 50-day moving average (around 420, with support near 400) and resistance near the 200-day moving averages (around 440 and 460). He noted Microsoft reports earnings on Wednesday and said if the stock “gets back on track” the worst may be over for software names. The piece also cites the iShares Expanded Tech-Software Sector ETF (IGV) performance — down more than 19% year-to-date but up over 11% in the past month — and references upcoming earnings from Meta and Visa and the Federal Reserve meeting.
Microsoft is a major tech company; its earnings and technical breakout can move the broader software sector and influence market sentiment during a heavy corporate earnings week.
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Key Takeaways & Evidence Grounding
- Jay Woods is chief market strategist at Freedom Capital Markets and commented on Microsoft ahead of its earnings.
- Microsoft was cited as trading between its 50-day (support ~420/400) and 200-day (resistance ~440/460) moving averages.
- Microsoft's earnings were scheduled for Wednesday (article published April 27, 2026).
- The iShares Expanded Tech-Software Sector ETF (IGV) was down more than 19% year-to-date but had rallied more than 11% over the past month.
- Woods also referenced upcoming earnings for Meta and Visa and discussed expectations for the Federal Reserve meeting.
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Crowded tech trade starting to unwind
CNBC contributor Todd Gordon reports that a long one‑sided tech trade — long semiconductors and short software — appears to be reversing. Chart indicators show the software ETF (IGV) rising versus the semiconductor ETF (SMH) after a recent low, and software is also improving versus the broader tech sector and the S&P 500. Gordon cites a Jefferies research report that contends “software is not dead, but weak software is,” and notes Jefferies names ServiceNow and Snowflake as top picks within a framework that favors infrastructure/hyperscaler names for AI growth while being selective on application software. The article outlines technical patterns and fundamentals for ServiceNow (a possible inverse head & shoulders) and Snowflake (strong revenue, net retention and an OpenAI partnership) as two ways to play the potential rotation.
Software Stocks Rally; IGV, ServiceNow, Workday Lead
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