Dan Ives: Software Stocks Flash Their Sharpest Buy Signal in Months

Dan Ives believes software stocks have just received their most compelling buy signal in several months. Oracle’s quarterly results marked a pivot point for an industry many investors had been avoiding.

Ives, a partner and senior managing director at Yorkville Ives, shared his view on CNBC’s Fast Money. He argued that institutional money must shift back into software, singling out Oracle, Adobe, Palantir and Snowflake.

Investors “Caught Offsides” as Sentiment Shifts

Ives contended Wall Street had undervalued Oracle’s backlog. He claimed expectations on the street were that there was a 50% to 60% probability the backlog would never be transformed into revenue. Achieving that conversion depends on Oracle building sufficient data centre capacity to satisfy demand from its cloud and AI clients.

“This is a penalty box stock.”

Dan Ives, CNBC

He added that a single strong quarter will not suffice. Oracle must demonstrate consistent performance before the market fully reassesses the stock. Investors will not reward the company for one earnings beat following months of doubt.

Software Has Similarities to Semicinductors

Ives contrasted software with semiconductors, where his confidence is higher. He noted a 13-to-1 demand-to-supply ratio in Asian chip markets.

That makes Nvidia a safer bet compared with AMD or Intel as those companies try to narrow the gap, he said. That caution aligns with a wider discussion around chipmaker earnings reactions, where sentiment has moved sharply on any hint of waning demand.

Software’s recovery follows a difficult period. The sector had trailed for months because of AI-related concerns until a series of software earnings turnarounds altered the story.

Ives said the change is now apparent across the software space, not just in one company.

Ives did not go as far as declaring a definitive buy signal, however.

“It’s like a lime green actually.”

Dan Ives, CNBC

That nuance is significant. Ives is describing a sector that is still demonstrating its worth, not one investors should pursue recklessly. Whether that lime green intensifies may depend on Oracle delivering consistent results in the quarters ahead.