Software sector drops nearly 30% in three months, caught in an unrelenting bearish grip

Dassault Systèmes and Capgemini at the forefront of a widespread correction

Out of the fifteen stocks in the sector, twelve ended in the red this Friday. LECTRA experienced the steepest decline of the day (-7.23%), bringing its quarterly drop to -31%. The stock's RSI has fallen to 15, indicating an extreme oversold condition. The two heavyweights in the sector, Dassault Systèmes (a market capitalization of 23 billion euros, -2.82% today) and CAPGEMINI (16.8 billion, -2.49%), are significantly below their 50 and 200-day moving averages, confirming the extent of the technical deterioration.

The only notable exception, VIRIDIEN, posted a quarterly performance of +36.74%, yet still dropped 6.48% during the session. Comparable sectors — IT Services (-2.67%) and Business Services (-2.30%) — reported similar declines, indicating widespread selling pressure across the entire technology and services ecosystem. The energy shock related to the conflict in the Middle East, with Brent crude above $109 and natural gas up 100% since late February, exacerbates the overall climate and weighs on the valuations of growth stocks, whose multiples are sensitive to rising risk premiums.

Conflicting Technical Signals Call for Caution

For investors, the picture is mixed. The sector's weighted RSI sits at 36.7, indicating a neutral zone but close to the oversold threshold, which could suggest a potential exhaustion point for selling pressure. More notably, the sector's MACD has recently crossed above its signal line, hinting at an emerging bullish momentum.
However, this technical uptick remains fragile. The sector's weighted average price is below its 50- and 200-day moving averages, indicating a medium- to long-term momentum that is still clearly bearish. Almost all major capitalizations in the segment—Dassault Systèmes, Capgemini, Vusion, PLANISWARE—are in this deteriorated state. As it stands, the positive MACD crossover resembles more of a technical stabilization signal rather than the start of an actual trend reversal.
The performance gap of over 28 points compared to the CAC 40 over three months highlights a deep sector underperformance, in a market environment where AI continues to capture increasing market share and geopolitical and energy stresses keep volatility elevated. Investors will be closely monitoring upcoming quarterly reports to assess whether this discount already factors in a slowdown in activity or if further downward revisions are expected.