Chart of the Day 📈 2/6/26: SaaS-Pocalypse Now

Mike Larson | Editor-in-Chief

I didn’t invent the term “SaaS-pocalypse” – but it suits the market vibe to a “T.” Software stocks in particular, and tech stocks in general, are getting hammered. So, is there anything that can turn the tide?

Before I answer that, take a look at my MoneyShow Chart of the Day below. It shows the year-to-date performance of the iShares Expanded Tech-Software Sector ETF (IGV), the State Street Technology Select Sector SPDR ETF (XLK), and the State Street SPDR S&P 500 ETF (SPY).

The short version? Software is radically underperforming the tech sector...and the tech sector is modestly underperforming the S&P 500.

In 2026, Software < Tech < S&P 500

That brings me back to the SaaS-pocalypse. The term refers to “Software as a Service” companies, which sell enterprise software that’s periodically updated remotely to large corporations and smaller businesses. It has historically been very profitable. But we’re seeing rapid advances in Artificial Intelligence (AI) tech and tools. That could allow companies to do more work on their own – cutting out SaaS middlemen.

It’s just the latest worry for the tech sector, too. Investors were already antsy over the enormous AI spending bills the hyperscalers are racking up. In fact, Alphabet Inc. (GOOGL) just said it plans a whopping $185 billion in capital expenditures this year. That’s double the amount it spent in 2025 and far above the $119.5 billion analysts expected.

So, again, is there anything that can turn the tide? I shared some thoughts in my MoneyShow Video Market Minute yesterday. But for traders, it comes down to: A) Is sentiment getting too bearish B) Is downside momentum getting exhausted and C) Are valuations getting cheap enough to attract a new base of buyers.

For my money, I think we’re close to satisfying that checklist. Or in plain English, panic-selling now doesn’t look like a smart move...SaaS-pocalypse or not!

Stockton: Amid Vicious Selling in Tech, Traders Can Find Solace in THESE Sectors

Worried about selling in tech and crypto? In this episode of the MoneyShow MoneyMasters Podcast, I sit down with Katie Stockton, founder and managing partner of Fairlead Strategies, to break down what the charts are really saying about markets in 2026.

Katie explains how technical analysis is shaping her outlook for big tech, software, energy, materials, and small caps – and why market leadership is rotating away from mega-cap tech. She also shares her read on the recent volatility in commodities, including gold and silver, and what the signals suggest for the months ahead. It’s a practical, chart-driven look at risk, rotation, and opportunity in today’s market.

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• XLK: What's Driving the Trading Turmoil in Tech
  👉️ TICKERS: XLE, RSP, XLB, XLK

  Technology was the big market laggard again on Wednesday following disappointing earnings and more software anxiety. Seven of the 11 sector SPDRs were higher on the day, but the State Street Technology Select Sector SPDR Fund (XLK) lost 2.8%, writes Tom Essaye, president of the Sevens Report.

• SPX: What Supply, Demand, and Divergence Data Tells Us About the Market 

  👉️ TICKER: SPX

  With numerous headlines causing confusion, the weight of evidence still favors the bulls and the S&P 500 Index (^SPX). What we have currently is flat intermediate-term demand coupled with contracting supply, observes Sam Stovall, chief investment strategist at CFRA Research.

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