IGV Investors: Watch Oracle's Free Cash Flow as the Real Test of AI Capex Economics

IGV’s slide is putting Oracle’s free-cash-flow outlook at the center of the AI-capex debate, as the iShares Expanded Tech-Software Sector ETF tests whether software multiples can hold. IGV closed Friday at $88.20, down 16.5% year to date and 18.9% over the past year. The fund’s decline accelerated after Oracle posted its worst week since the 2001 dot-com bust, falling 19.4% in five sessions amid debt and free-cash-flow concerns. With a 0.39% expense ratio, IGV is positioned as a proxy for U.S. software, holding Microsoft (22 P/E), Oracle (25 P/E), Palantir (127), and Palo Alto Networks (267). Over the next 12 months, the article flags two signals: the 10-year Treasury yield, currently 4.40% (79th percentile), and whether hyperscaler AI capex stays self-funding. It cites Oracle’s TTM capex of $55.7 billion versus negative $23.7 billion free cash flow and $130 billion debt, arguing market skepticism is reflected in Oracle’s reset risk.