Cybersecurity and enterprise software stocks have been market dogs since the start of 2026, with fears that AI will wipe out a wide range of companies in the enterprise space dominating the narrative. But they snapped a brutal losing streak this past week, joining in the broader market rally that saw all losses from the U.S.-Iran war regained by the Dow Jones Industrial Average and S&P 500.

Cybersecurity has been “a victim of some of the AI-related headlines,” Christian Magoon, Amplify ETFs CEO, said on this week’s “ETF Edge.”

It wasn’t just niche cybersecurity names. Take Microsoft, for example, which was recently down close to 20% for the year. Its shares surged last week by 13%.

A big driver of the pummeling in software stocks was a rotation within tech by investors to AI infrastructure and semiconductors and some other names in large-cap tech, Magoon said, and since cybersecurity stocks and ETFs are heavily weighted towards software companies, they were left behind even as those businesses continue to grow on a fundamental basis.

But Wall Street now has become more bullish with the stocks at lower levels. Brent Thill, Jefferies tech analyst, said last week that the worst may be over for software stocks. “I think that this concept that software is dead, and then Anthropic and OpenAI are going to kill the entire industry, is just over-exaggerated,” he said on CNBC’s “Squawk Box” on Wednesday.

“Big Short” investor Michael Burry wrote in a Substack post on Wednesday that he is becoming bullish about software stocks after the recent selloff. “Software stocks remain interesting because of accelerated extreme declines last week arising from a reflexive positive feedback loop between falling software stocks and changes in the market for their bank debt,” he wrote.

The Global X Cybersecurity ETF (BUG), is down about 12% since the beginning of the year, with top holdings including Palo Alto Networks, Fortinet, Akamai Technologies and CrowdStrike. But BUG was up 12% last week. The First Trust NASDAQ Cybersecurity ETF (CIBR) is down 6% for the year, but up 9% in the past week.

Piper Sandler analyst Rob Owens reiterated an “overweight” rating on Palo Alto Networks which helped the stock pop 7% — it is now down roughly 6% on the year. Its peers saw similar moves, including CrowdStrike.

Magoon said expectations may also have become too high in cybersecurity, and with a crowding effect among investors, solid results were not enough to to push stocks higher. But the down-and-then-back-up 2026 for the sector is also a reminder that when stocks fall sharply in a short period of time, opportunity may knock.

“Once you’re down over 10% in some of these subsectors, you start to see the contrarians start to say, ‘well, maybe I’ll take a look at this,'” Magoon said.

Magoon said AI does add both opportunity and uncertainty to the cybersecurity equation,…

May this year prove as lucrative as 2025, when the S&P 500 rallied 16.39% mostly on the back of enthusiasm over artificial intelligence.

Other highlights of last year: Google-parent Alphabet was the most magnificent of the Magnificent Seven; Colombia’s stock market was the surprise leader of the MSCI All Country World Index; silver surged over 141%, outshining its sibling gold, which itself had a phenomenal year.

And even though the first week of 2026 isn’t yet over, global markets and investors already have to contend with a major geopolitical flare-up: the U.S.’ attack on Venezuela.

The situation is still developing, so here’s a rundown to bring you up to speed:

The oil question: President Donald Trump said the U.S.’ oil companies will invest in Venezuela’s energy sector. An oil consulting firm said Petróleos de Venezuela, the South American nation’s state-owned oil company, still “controls the majority of the oil production and reserves.” And analysts think crude prices should remain steady in the near term.

The foreign policy front: Analysts think the U.S. strike on Venezuela, despite its apparent display of forceful interference in another country, will not embolden China to do the same with regard to Taiwan.

And Danish Prime Minister Mette Frederikse is taking no chances with Trump. On Sunday, following the attack, she cautioned the U.S. to “stop the threats against a historically close ally and against another country and another people who have said very clearly that they are not for sale.”

It’s a lot to take in for the first Monday of 2026 — for now, we’ll have to wait for the U.S. to wake up for updates on their front.