State Street SPDR S&P Software & Services ETF

XSW

Market cap $421M

ETF Action's Mike Akins is encouraging investors to boost exposure to groups that underperformed compared with major artificial intelligence stocks.

Designed to provide broad exposure to the Technology ETFs category of the market, the State Street SPDR S&P Software & Services ETF (XSW) is a smart beta exchange traded fund launched on 09/28/2011.

Software ETFs reached oversold territory after a sharp June pullback, yet April lows remain decisively defended, signaling resilience. Cybersecurity leaders CRWD and PANW decisively outperform, trading at elevated multiples (CRWD ~130x, PANW >70x), while broader application software trades below 19x forward P/E.

Software-focused ETFs are gaining attention as AI adoption boosts demand for enterprise applications, cloud services, and cybersecurity.

Looking for broad exposure to the Technology - Software segment of the equity market? You should consider the State Street SPDR S&P Software & Services ETF (XSW), a passively managed exchange traded fund launched on September 28, 2011.

AI software spending is surging, lifting prospects for ETFs like IGV as firms monetize cloud, security and enterprise AI tools.

State Street SPDR S&P Software & Services ETF is downgraded from Buy to Hold after a sharp rebound but persistent underperformance. XSW's diversified, equal-weighted structure limits concentration risk, but it remains the smallest tech ETF on my watchlist and has lagged broader tech indices. Despite a recent 22% rally, XSW is down 12% in 2026 and faces headwinds from potential sector rotation and bearish technology outlooks.

Launched on 09/28/2011, the State Street SPDR S&P Software & Services ETF (XSW) is a smart beta exchange traded fund offering broad exposure to the Technology ETFs category of the market.

Credit risk in the software sector may still be understated, as weaker growth and less reliable sponsor support could push defaults higher over time, even as refinancing pressure remains low. If the sector weakens further, history suggests losses could be larger than investors expect, as relevant past periods of heavy stress have led to below-average recoveries, not just more defaults.

Designed to provide broad exposure to the Technology - Software segment of the equity market, the State Street SPDR S&P Software & Services ETF (XSW) is a passively managed exchange traded fund launched on September 28, 2011.