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U.S. Software Industry Analysis

UpdatedFeb 24, 2026
DataAggregated Company Financials
Companies426
  • 7D-5.4%
  • 3M-23.8%
  • 1Y-15.0%
  • YTD-22.5%

Over the last 7 days, the Software industry has dropped 2.0%, driven by a pullback from Microsoft of 4.2%. In contrast, Figma has gained 9.9%. The industry has fallen 13% in the last year. Looking forward, earnings are forecast to grow by 18% annually.

Industry Valuation and Performance

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

DateMarket CapRevenueEarningsPEAbsolute PEPS
Tue, 24 Feb 2026US$5.5tUS$661.0bUS$163.6b24.3x33.6x8.3x
Thu, 22 Jan 2026US$6.6tUS$649.0bUS$159.9b30.1x41x10.1x
Sat, 20 Dec 2025US$7.1tUS$645.4bUS$164.7b32.4x42.9x11x
Mon, 17 Nov 2025US$7.4tUS$641.0bUS$159.9b31.2x46x11.5x
Wed, 15 Oct 2025US$7.8tUS$621.4bUS$151.7b34.9x51.6x12.6x
Fri, 12 Sep 2025US$7.6tUS$620.6bUS$151.7b35.2x50.3x12.3x
Sun, 10 Aug 2025US$7.6tUS$613.9bUS$150.0b37.7x50.5x12.3x
Tue, 08 Jul 2025US$7.4tUS$598.9bUS$131.3b43.4x56.4x12.4x
Thu, 05 Jun 2025US$6.8tUS$595.7bUS$131.6b37.2x51.9x11.5x
Sat, 03 May 2025US$6.3tUS$589.0bUS$131.0b33.5x48.3x10.7x
Mon, 31 Mar 2025US$5.7tUS$582.3bUS$130.7b29.5x43.7x9.8x
Wed, 26 Feb 2025US$6.3tUS$580.0bUS$129.5b36.6x48.6x10.8x
Fri, 24 Jan 2025US$6.7tUS$568.2bUS$129.2b42.6x51.9x11.8x
Sun, 22 Dec 2024US$6.6tUS$569.1bUS$128.8b40.8x51.1x11.6x
Tue, 19 Nov 2024US$6.3tUS$566.6bUS$127.1b40.9x49.9x11.2x
Thu, 17 Oct 2024US$6.0tUS$551.7bUS$124.1b38.7x48.7x11x
Sat, 14 Sep 2024US$6.0tUS$552.4bUS$124.0b38.6x48x10.8x
Mon, 12 Aug 2024US$5.6tUS$548.6bUS$121.5b34.7x46.1x10.2x
Wed, 10 Jul 2024US$6.1tUS$530.5bUS$118.1b40.1x52x11.6x
Fri, 07 Jun 2024US$5.2tUS$476.6bUS$107.1b40.2x48.8x11x
Sun, 05 May 2024US$5.2tUS$476.8bUS$103.2b42.3x50.1x10.8x
Tue, 02 Apr 2024US$5.4tUS$465.9bUS$98.3b45.2x54.9x11.6x
Thu, 29 Feb 2024US$5.3tUS$466.6bUS$95.1b42.8x56.1x11.4x
Sat, 27 Jan 2024US$5.5tUS$486.8bUS$82.4b47.4x66.2x11.2x
Mon, 25 Dec 2023US$5.2tUS$486.1bUS$82.9b44.5x62.4x10.6x
Wed, 22 Nov 2023US$4.9tUS$482.4bUS$79.9b45.4x61.5x10.2x
Fri, 20 Oct 2023US$4.5tUS$477.3bUS$73.7b42.5x61.4x9.5x
Sun, 17 Sep 2023US$4.6tUS$480.1bUS$73.0b45.2x62.5x9.5x
Tue, 15 Aug 2023US$4.5tUS$473.1bUS$70.1b45.3x63.7x9.4x
Thu, 13 Jul 2023US$4.5tUS$460.7bUS$60.1b49.2x75.5x9.9x
Sat, 10 Jun 2023US$4.3tUS$460.1bUS$62.1b43.1x69.8x9.4x
Mon, 08 May 2023US$4.0tUS$455.5bUS$60.6b38.1x65.6x8.7x
Wed, 05 Apr 2023US$3.9tUS$453.7bUS$60.6b44x64.9x8.7x
Fri, 03 Mar 2023US$3.5tUS$441.3bUS$58.9b42.7x59.9x8x
Price to Earnings Ratio

59.9x


Total Market Cap: US$3.5tTotal Earnings: US$58.9bTotal Revenue: US$441.3bTotal Market Cap vs Earnings and Revenue0%0%0%
U.S. Software Industry Price to Earnings3Y Average 54x202420252026
Current Industry PE
  • Investors are pessimistic on the American Software industry, indicating that they anticipate long term growth rates will be lower than they have historically.
  • The industry is trading at a PE ratio of 34.2x which is lower than its 3-year average PE of 54.0x.
  • The 3-year average PS ratio of 10.7x is higher than the industry's current PS ratio of 8.5x.
Past Earnings Growth
  • The earnings for companies in the Software industry have grown 41% per year over the last three years.
  • Revenues for these companies have grown 14% 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-0.35%
Tech-0.32%
Software-5.38%
Application Software-5.09%
Systems Software-5.51%
Industry PE
  • Investors are most optimistic about the Application Software industry which is trading above its 3-year average PE ratio of 9.2x.
    • Analysts are expecting annual earnings growth of 22.6%, which is higher than its past year's earnings growth of 20.0% per year.
  • Investors are most pessimistic about the Systems Software industry, which is trading below its 3-year average of 40.1x.
Forecasted Growth
  • Analysts are most optimistic on the Application Software industry, expecting annual earnings growth of 23% 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 16% 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
ROP Roper TechnologiesUS$335.706.4%
+US$2.2b		-42.8%PE23.3x
FIG FigmaUS$24.759.9%
+US$1.7b		n/aPS12.2x
PANW Palo Alto NetworksUS$144.14-13.7%
US$1.3b		-24.3%PE91.8x
NBIS Nebius GroupUS$100.612.7%
+US$657.8m		177.8%PE877.8x
TYL Tyler TechnologiesUS$317.434.4%
+US$567.0m		-48.3%PE43.2x

Latest News

RNG
US$34.58
RingCentral
7D
14.5%
1Y
19.5%
DDOG
US$102.62
Datadog
7D
-18.0%
1Y
-12.7%

DDOG: AI Workloads And Cloud Migrations Will Drive Multiple Re Rating

Our updated Datadog narrative reflects a lower fair value estimate of $241.36, as analysts trim price targets by $15 to $70 on more cautious assumptions for revenue growth and profit margins, partly offset by a higher future P/E multiple that still points to investor interest in the story. Analyst Commentary Recent research on Datadog shows a split tape, but with a clear pocket of bullish analysts who see room for the shares to re-rate if execution on growth and margins holds up against rising competition and budget scrutiny.
MSFT
US$384.47
Microsoft
7D
-3.1%
1Y
-3.4%

Microsoft: Real‑Terms Economic Value Anchored in Durability, Not Growth Assumptions

Microsoft’s true economic value rests on its unmatched enterprise cash-flow durability, high-retention subscription model, and deep competitive moats in operating systems, productivity platforms, and cloud infrastructure. These produce stable, high-margin recurring cash flows capable of long-duration compounding under disciplined capital allocation.
PANW
US$144.14
Palo Alto Networks
7D
-13.7%
1Y
-24.3%

Palo Alto Networks (PANW): Collateral Damage

PANW is down 22% over the past year and 10.9% in the last seven days alone. Most people are calling it a victim of AI disruption.
CRM
US$178.16
Salesforce
7D
-6.1%
1Y
-42.2%

CRM: AI Overhang And 2026 Setup Will Support Long Term Upside

Our updated analyst price target for Salesforce edges down by about $10, reflecting slightly higher discount rate assumptions and modestly lower projected profit margins, even as analysts continue to cite mixed signals around AI products like Agentforce, along with broader software sector multiple compression. Analyst Commentary Recent Street research around Salesforce has turned more cautious on valuation, with several firms cutting price targets, but the tone is not uniformly negative.
FIG
US$24.75
Figma
7D
9.9%
1Y
n/a

Figma is still elite

Figma is still strong at the product level. Deeply embedded in modern product teams.
ROP
US$335.70
Roper Technologies
7D
6.4%
1Y
-42.8%

ROP: Software Cash Flows And Buybacks Will Support Multiple Re Rating

Roper Technologies' updated analyst price target reflects a reset across the Street, with multiple firms trimming their views by $32 to $141 as analysts recalibrate for cooler organic revenue trends, slightly adjusted discount and growth assumptions, and a modestly lower expected future P/E multiple. Analyst Commentary Recent Street research on Roper Technologies clusters around two main themes, with most analysts cutting price targets and a few adjusting ratings as they reassess growth and valuation expectations.
FTNT
US$75.60
Fortinet
7D
-11.6%
1Y
-30.4%
CRWD
US$350.33
CrowdStrike Holdings
7D
-18.5%
1Y
-10.6%

CRWD: Future Performance Will Reflect AI Security Leadership And Expanding Identity Platform

Narrative Update: CrowdStrike Holdings The updated analyst price target for CrowdStrike edges higher to about $547 from roughly $533, as analysts factor in slightly stronger modeled revenue growth and profit margins, along with a more moderate future P/E assumption and mixed, but generally constructive, Street research around AI security positioning and recent rating changes. Analyst Commentary Recent research on CrowdStrike gives you a mixed but generally constructive picture, with several firms adjusting price targets and ratings as they reassess AI risk, software multiples, and security spending trends.
ADBE
US$246.68
Adobe
7D
-6.6%
1Y
-44.5%

ADBE: AI Transition And Creative Ecosystem Partnerships Will Reshape Future Cash Flows

Our fair value estimate for Adobe has edged higher to $580.27 from $575.83 as analysts broadly reduce price targets and ratings in response to softer Digital Media growth expectations, questions about the durability of the competitive moat, and concerns that AI benefits may be slower to show up in revenue and margins than previously hoped. Analyst Commentary Recent Street research on Adobe has tilted more cautious, with several firms cutting ratings and price targets as they reassess Digital Media growth expectations, competition, and the timing of AI monetization.
NBIS
US$100.61
Nebius Group
7D
2.7%
1Y
177.8%

NBIS: Microsoft Contract And 2.5GW Power Sourcing Will Support Future Capacity

Analysts have kept their Nebius Group price target steady at $211, but are now using slightly higher discount rates and a richer future P/E of about 34x. This reflects a mix of bullish views on the Microsoft contract, cautious revenue and margin assumptions, and a wide range of initial ratings from neutral to top pick calls.
TYL
US$317.43
Tyler Technologies
7D
4.4%
1Y
-48.3%
ORCL
US$141.31
Oracle
7D
-11.8%
1Y
-16.9%
INTU
US$359.55
Intuit
7D
-10.0%
1Y
-36.6%
CRCL
US$61.17
Circle Internet Group
7D
1.9%
1Y
n/a
AUR
US$4.74
Aurora Innovation
7D
5.8%
1Y
-32.4%