Retail traders drove a record single-day net inflow into the leading exchange-traded fund that tracks U.S. software companies on Monday, according to data compiled by Vanda Research. Mom-and-pop investors purchased a net $46 million of shares in the iShares Expanded Tech-Software Sector ETF, exceeding the prior single-day retail buying record of $32.8 million by roughly 40%.
Vanda Research highlighted the move in a note, saying: "The AI/semi trade is showing early signs of broadening out from a flows perspective. Software is emerging as one of the initial beneficiaries." That assessment accompanied a sharp session for several large software-related names, with ServiceNow, International Business Machines, Adobe, Atlassian, Salesforce and Workday each rallying between 7.5% and 9.6% in Monday's trading.
The ETF itself advanced 5.9% on Monday, reaching its highest level in about five months. The price action reflected the concentrated retail buying as well as the broad uptick in software stock prices during that session.
Market participants had been watching the software group closely after concerns about AI-driven disruption began mounting earlier in the year. Investor anxiety rose in February when Anthropic introduced tools that automated tasks across multiple domains, including marketing and data analytics, prompting questions about whether such automation could pressure traditional software business models.
Despite the strong session, the rally in software stocks eased on Tuesday. The software ETF declined 3.1% the next trading day, and specific names including Intuit and Workday showed up among the weakest performers in early S&P 500 trading on Tuesday. Including those losses, the ETF was down by more than 1% year-to-date.
The sequence of events illustrates a market in which flows and sentiment can swing rapidly: a record retail inflow and a multi-stock rally in one session followed by a notable pullback in the next. The data points from Vanda Research provide a clear snapshot of retail behavior and its immediate market impact on a theme - software - that is being watched closely as the AI trade broadens.