IGV ETF

At the beginning of 2025, Wall Street is still showing fluctuations, which creates a chance for investors to purchase ETFs at lower prices.

In the past, software has generally done better than hardware, but recently, AI-powered hardware has gained a lot of attention. It might be time to consider changing your investments. The IGV ETF's software portfolio appears to be overpriced, with a 38x PE and 2.3x PEG, suggesting only a 1% potential increase, while the semiconductor sector (SOXX ETF) shows a promising 25% upside with better earnings growth and lower prices.

Sung Cho, who is the co-head of public tech investing at Goldman Sachs, appears on 'Closing Bell' to talk about technology investments and company earnings.

Carter Worth, the founder and CEO of Worth Charting, appears on 'Fast Money' to share his thoughts on whether the shift from semiconductors to software will keep going.

The iShares Expanded Tech-Software Sector ETF (IGV) is an exchange-traded fund that aims to give investors a wide view of the Technology - Software part of the stock market. It was launched on July 10, 2001, and is managed passively.

IGV has recently done better than SMH, thanks to improved price movements and a slightly lower P/E ratio, which has prompted me to change my recommendation from hold to buy. Even though IGV has a high P/E ratio, its long-term earnings growth and a PEG ratio just over 2x make it appealing. The ETF's positive technical pattern, including a possible cup and handle breakout, indicates strong price trends for the end of this year and into next year.

Software industry underperforming due to slowing growth trend and macroeconomic challenges. The iShares Expanded Tech-Software Sector ETF is expected to underperform because software companies' declining revenue and earnings trend is likely to continue. Consider avoiding IGV and explore other options like IGM, SCHG and QQQM for better returns in the current bull run.

IGV has underperformed the broader technology sector, but has attractive earnings growth rates and valuation. Consensus forecasts show mid to high-teens earnings growth for software stocks in IGV's portfolio between 2024 and 2026. IGV's growth potential is lower than the broader technology sector, but its valuation is not expensive compared to historical averages.

Brad Gerstner, founder of Altimeter Capital, joins CNBC's Halftime Report to discuss the software sector.