Software stocks were thought to be a can’t miss trade this year, but now they are struggling

In a year plagued by U.S.-China trade tensions where investors piled into “tariff-proof” software stocks like Microsoft and Salesforce, a stunning reversal is occurring.

As trade tensions cool-off and a slowing economy forces companies to spend less on software services, these high-flying technology stocks that rely heavily on corporate dollars are being pressured.

“A lot of people had crowded into software as one of the few areas in the equities market where you could see some real growth and you could see that growth without a lot of trade risk,” said Keith Weiss, software analyst at Morgan Stanley. “What broke…