Investing IdeasBrowse All StocksMarkets
Have your own idea? Try our Stock Screener
Header cover image

U.S. Software Industry Analysis

UpdatedAug 21, 2026
DataAggregated Company Financials
Companies424
  • 7D-3.5%
  • 3M10.6%
  • 1Y-7.2%
  • YTD0.6%

Over the last 7 days, the Software industry has dropped 3.5%, driven by Microsoft declining 3.1%. On the other hand Strategy is actually up 16%. Overall the industry is down 7.2% in 12 months. As for the next few years, earnings are expected to grow by 21% per annum.

Industry Valuation and Performance

Has the U.S. Software Industry valuation changed over the past few years?

DateMarket CapRevenueEarningsPEAbsolute PEPS
Fri, 21 Aug 2026US$6.7tUS$712.8bUS$137.4b30.6x49x9.4x
Sun, 19 Jul 2026US$5.9tUS$699.4bUS$156.4b28.6x37.5x8.4x
Tue, 16 Jun 2026US$5.9tUS$698.5bUS$156.6b26.4x37.7x8.4x
Thu, 14 May 2026US$6.0tUS$685.3bUS$155.6b28.2x38.5x8.7x
Sat, 11 Apr 2026US$5.3tUS$667.8bUS$161.4b26.9x32.5x7.9x
Mon, 09 Mar 2026US$5.9tUS$665.5bUS$160.9b27x36.8x8.9x
Wed, 04 Feb 2026US$6.1tUS$661.2bUS$174.6b26.3x34.9x9.2x
Fri, 02 Jan 2026US$7.1tUS$645.3bUS$164.7b31.8x43x11x
Sun, 30 Nov 2025US$7.1tUS$640.4bUS$161.2b31.8x44x11.1x
Tue, 28 Oct 2025US$7.9tUS$621.4bUS$151.9b33.9x52x12.7x
Thu, 25 Sep 2025US$7.8tUS$620.8bUS$151.7b36.3x51.7x12.6x
Sat, 23 Aug 2025US$7.3tUS$615.8bUS$150.8b35x48.4x11.9x
Mon, 21 Jul 2025US$7.5tUS$596.3bUS$130.8b42.9x57.3x12.6x
Wed, 18 Jun 2025US$7.1tUS$598.9bUS$131.1b40.5x54.2x11.9x
Fri, 16 May 2025US$6.7tUS$591.1bUS$131.5b32.9x51.1x11.4x
Sun, 13 Apr 2025US$5.7tUS$581.3bUS$131.8b29.3x42.9x9.7x
Tue, 11 Mar 2025US$6.0tUS$582.3bUS$129.6b31.7x45.9x10.2x
Thu, 06 Feb 2025US$6.5tUS$585.9bUS$132.4b42.2x49.1x11.1x
Sat, 04 Jan 2025US$6.4tUS$569.1bUS$129.0b40.3x49.2x11.2x
Mon, 02 Dec 2024US$6.5tUS$566.8bUS$127.5b42.3x51.2x11.5x
Wed, 30 Oct 2024US$6.1tUS$552.9bUS$124.3b38.9x49.3x11.1x
Fri, 27 Sep 2024US$6.1tUS$552.4bUS$124.0b38.3x48.8x11x
Sun, 25 Aug 2024US$5.8tUS$550.2bUS$121.7b37.2x47.8x10.6x
Tue, 23 Jul 2024US$5.8tUS$530.6bUS$118.4b41x49.3x11x
Thu, 20 Jun 2024US$5.9tUS$531.3bUS$118.1b39.6x49.7x11x
Sat, 18 May 2024US$5.3tUS$474.3bUS$104.8b45.1x51x11.3x
Mon, 15 Apr 2024US$5.3tUS$466.4bUS$98.4b41.9x54.2x11.4x
Wed, 13 Mar 2024US$5.3tUS$470.2bUS$98.5b46.6x54.1x11.3x
Fri, 09 Feb 2024US$5.4tUS$464.0bUS$89.8b42.9x59.9x11.6x
Sun, 07 Jan 2024US$5.0tUS$486.2bUS$82.8b45.1x60.3x10.3x
Tue, 05 Dec 2023US$5.1tUS$485.2bUS$81.9b44.7x62x10.5x
Thu, 02 Nov 2023US$4.5tUS$484.8bUS$79.0b42.3x57.2x9.3x
Sat, 30 Sep 2023US$4.4tUS$477.4bUS$73.2b44.8x59.7x9.2x
Mon, 28 Aug 2023US$4.5tUS$474.4bUS$71.2b43.5x62.6x9.4x
Price to Earnings Ratio

62.6x


Total Market Cap: US$4.5tTotal Earnings: US$71.2bTotal Revenue: US$474.4bTotal Market Cap vs Earnings and Revenue0%0%0%
U.S. Software Industry Price to Earnings3Y Average 49.3x202420252026
Current Industry PE
  • Investors are relatively neutral on the American Software industry at the moment, indicating that they anticipate long term growth rates to remain steady.
  • The industry is trading close to its 3-year average PE ratio of 49.3x.
  • The 3-year average PS ratio of 10.6x is higher than the industry's current PS ratio of 9.4x.
Past Earnings Growth
  • The earnings for companies in the Software industry have grown 25% per year over the last three years.
  • Revenues for these companies have grown 15% per year.
  • This means that more sales are being generated by these companies overall, and subsequently their profits are increasing too.

Industry Trends

Which industries have driven the changes within the U.S. Tech industry?

US Market-2.09%
Tech-3.71%
Software-3.49%
Application Software-0.44%
Systems Software-4.56%
Industry PE
  • Investors are most optimistic about the Systems Software industry even though it's trading below its 3-year average PE ratio of 38.2x.
    • Analysts are expecting annual earnings growth of 18.0%, which is lower than the prior year's growth of 20.4% per year.
Forecasted Growth
  • Analysts are most optimistic on the Application Software industry, expecting annual earnings growth of 28% over the next 5 years.
  • This is roughly in line with its past earnings growth rate.
  • In contrast, the Systems Software industry is expected to see its earnings grow by 18% per year over the next few years.

Top Stock Gainers and Losers

Which companies have driven the market over the last 7 days?

CompanyLast Price7D1YValuation
MSTR StrategyUS$112.3920.8%
+US$7.4b		-68.6%PS86.7x
INTU IntuitUS$361.874.7%
+US$4.4b		-45.4%PE21.6x
CRM SalesforceUS$205.432.0%
+US$3.3b		-16.4%PE21x
ADBE AdobeUS$272.223.1%
+US$3.3b		-24.8%PE15x
NOW ServiceNowUS$129.752.0%
+US$2.6b		-26.0%PE80.3x

Latest News

ORCL
US$142.07
Oracle
7D
-9.1%
1Y
-39.1%
PANW
US$349.56
Palo Alto Networks
7D
-11.7%
1Y
90.7%
CRWD
US$190.34
CrowdStrike Holdings
7D
-12.3%
1Y
81.0%
MSTR
US$112.39
Strategy
7D
20.8%
1Y
-68.6%
Seeking Alpha • 21h

Strategy Doubles Down On Its Aggressive Defense Of 12.6% Yielding STRC

Summary Strategy has aggressively defended its STRC preferreds, restoring prices close to the $100 per share redemption anchor after a deep 25% discount in June. STRC now offers a 13.6% dividend yield, about 900 basis points above the 10-year Treasury, reflecting its unique risk profile. MSTR’s $63 billion liquidity wall, from USD reserves and BTC holdings, underpins ongoing STRC repurchases and dividend stability. I maintain a Hold rating on STRC on the back of its high yield and the recent defensive actions. The security is speculative, and liabilities are material. Read the full article on Seeking Alpha
NBIS
US$220.11
Nebius Group
7D
-13.7%
1Y
232.6%
NOW
US$129.75
ServiceNow
7D
2.0%
1Y
-26.0%
Narrative Update • Aug 19

NOW: AI Seat Compression And Margin Pressure Will Restrain Long Term Upside

Analysts raised their fair value estimate for ServiceNow to $84.88 from $82.13, citing updated assumptions for the discount rate, revenue growth, profit margin, and future P/E multiples. What’s in the News for ServiceNow ServiceNow launched six integrated Autonomous Security solutions as part of its Shift Zero initiative, targeting exposure management, vulnerability detection, cyber physical security, identity and access security, incident response, and compliance.
BMNR
US$21.57
Bitmine Immersion Technologies
7D
17.9%
1Y
-54.8%
DDOG
US$232.55
Datadog
7D
-9.0%
1Y
77.2%
Narrative Update • Aug 19

DDOG: AI Workload Concentration Will Eventually Undermine Lofty Share Pricing

Datadog's analyst price target framework has shifted higher, with fair value moving from about $194.05 to $223.41 as analysts incorporate recent Q2 results, broad price target resets toward the $280 to $320 range, and updated assumptions for slightly lower growth and margins, paired with a higher future P/E of about 305x. Analyst Commentary Street research on Datadog has been active around the latest Q2 results, with many firms revisiting their models and price targets in light of recent performance metrics, guidance and valuation.
FTNT
US$150.79
Fortinet
7D
-5.8%
1Y
88.4%
MSFT
US$481.15
Microsoft
7D
-2.9%
1Y
-5.1%
Narrative Update • Aug 19

MSFT: AI Infrastructure And Custom Chips Will Sustain Premium Earnings Multiples

Microsoft's updated analyst price target framework reflects a higher fair value estimate of $717.92, with analysts pointing to the company's AI driven Azure and M365 Commercial Cloud growth, stronger profit margin assumptions, and a lower projected future P/E multiple as key supports for the change. Analyst Commentary Recent Street research shows a broadly constructive tone around Microsoft, with many bullish analysts updating price targets and reiterating confidence in the company’s AI centric cloud strategy.
PLTR
US$173.96
Palantir Technologies
7D
-2.8%
1Y
11.4%
Narrative Update • Aug 19

PLTR: Record AI Wins Will Likely Struggle To Justify Lofty Expectations

Palantir Technologies' fair value estimate has been raised by analysts from $96.21 to $99.77. The change reflects updated assumptions for slightly higher revenue growth, a modestly higher discount rate, resilient profit margins and Street research that highlights what analysts describe as exceptional recent results, stronger U.S. commercial momentum and expanding AI partnerships.
INTU
US$361.87
Intuit
7D
4.7%
1Y
-45.4%
Narrative Update • Aug 18

INTU: AI Restructuring And Workforce Reset Will Support Future Multiple Re Rating

Intuit's analyst price target has shifted lower, with the fair value estimate moving from $488.17 to $449.20 as analysts build in slightly more conservative assumptions around growth, margins, and future P/E multiples in advance of potential guidance resets into fiscal 2027. Analyst Commentary Recent Street commentary on Intuit highlights a split view on the stock.
TEAM
US$174.91
Atlassian
7D
5.4%
1Y
6.3%
ADBE
US$272.22
Adobe
7D
3.1%
1Y
-24.8%
Seeking Alpha • Aug 17

Adobe: Even If It Wins With AI, The Market May Take Years To Forgive

Summary Rating downgraded to Strong Sell, even after ADBE's 30% rebound from its $192 low, because the core AI-disruption thesis remains unchanged. Q2 FY2026 results beat expectations, but full-year ARR growth guidance stayed flat at 10.2%. The freemium strategy is boosting user numbers but not revenue. Market sentiment can lag fundamentals for years—as shown by Microsoft, which took 16 years to recover its share price despite strong underlying growth. Read the full article on Seeking Alpha
CRM
US$205.43
Salesforce
7D
2.0%
1Y
-16.4%
Seeking Alpha • Aug 14

Salesforce: Ride The Buyback Boost

Summary Salesforce, Inc. offers a compelling dip-buying opportunity as SaaS sector sentiment rebounds and private equity eyes peers like Workday. CRM trades at just 14x forward EPS, presenting relative value versus Workday, which is attracting buyout interest at a higher multiple. Massive $27.1 billion share buybacks and a 23% net buyback yield, position CRM for significant EPS growth, despite increased debt. With FQ2 guidance for 10–11% revenue growth and robust free cash flow, the stock remains attractive below all-time highs amid AI-driven enterprise demand. Read the full article on Seeking Alpha
CRCL
US$83.66
Circle Internet Group
7D
11.0%
1Y
-36.5%