When was the last time software traded cheaper than semiconductors?
It may be happening right now. The selloff in software has pushed valuations to levels that may surprise you.
Name
Forward P/E
YTD
Adobe (ADBE)
10x
-21%
Trade Desk (TTD)
12x
-32%
Workday (WDAY)
14x
-30%
Salesforce (CRM)
15x
-25%
Avg Top Semis
22x
+9%
Software (IGV) vs Semiconductors (SMH): 1-Year Performance
Software's Forward P/E is at its lowest level in nearly a decade. With names like Adobe trading at 10x forward earnings, the sector may be worth a look for clients already comfortable with the downside.
Ways To Express This View
Income
Autocall with coupon + deep buffer on IGV
Growth
Accelerated return note with buffer on IGV
Snowball
Accumulated coupon with barrier on IGV or basket
Some clients may find the risk/reward setup here interesting. Reach out to vinay@marinelayeradvisors.com for live options
