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

U.S. Software Industry Analysis

UpdatedApr 24, 2026
DataAggregated Company Financials
Companies435
  • 7D-1.1%
  • 3M-12.3%
  • 1Y-1.6%
  • YTD-15.3%

Over the last 7 days, the Software industry has dropped 1.1%, driven by a pullback from Microsoft of 1.1%. In contrast, Strategy has gained 16%. As for the longer term, the industry's performance has been flat for the past year. As for the next few years, earnings are expected to grow by 19% per annum.

Industry Valuation and Performance

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

DateMarket CapRevenueEarningsPEAbsolute PEPS
Fri, 24 Apr 2026US$6.1tUS$668.5bUS$157.0b30x39.1x9.2x
Sun, 22 Mar 2026US$5.6tUS$668.3bUS$162.0b29.4x34.4x8.3x
Tue, 17 Feb 2026US$5.7tUS$660.4bUS$164.0b26.4x34.7x8.6x
Thu, 15 Jan 2026US$6.9tUS$648.9bUS$159.8b31.8x42.9x10.6x
Sat, 13 Dec 2025US$7.2tUS$645.9bUS$164.8b32.9x43.7x11.1x
Mon, 10 Nov 2025US$7.4tUS$640.0bUS$159.1b33.1x46.5x11.6x
Wed, 08 Oct 2025US$7.9tUS$621.4bUS$151.8b35.6x52.1x12.7x
Fri, 05 Sep 2025US$7.3tUS$617.8bUS$151.3b35x48.5x11.9x
Sun, 03 Aug 2025US$7.6tUS$611.0bUS$146.9b39.7x51.4x12.4x
Tue, 01 Jul 2025US$7.2tUS$599.0bUS$131.2b42.2x55.1x12.1x
Thu, 29 May 2025US$6.8tUS$593.0bUS$131.7b36.5x51.4x11.4x
Sat, 26 Apr 2025US$5.9tUS$581.1bUS$131.9b32x44.4x10.1x
Mon, 24 Mar 2025US$5.9tUS$582.8bUS$131.2b29.5x45.2x10.2x
Wed, 19 Feb 2025US$6.6tUS$588.2bUS$130.0b42.2x50.8x11.2x
Fri, 17 Jan 2025US$6.4tUS$569.2bUS$129.3b40.1x49.3x11.2x
Sun, 15 Dec 2024US$6.7tUS$569.1bUS$128.8b41.7x52.3x11.8x
Tue, 12 Nov 2024US$6.4tUS$567.0bUS$123.7b41.4x51.8x11.3x
Thu, 10 Oct 2024US$6.0tUS$551.7bUS$124.1b38.1x48.2x10.8x
Sat, 07 Sep 2024US$5.6tUS$551.3bUS$123.1b34.9x45.6x10.2x
Mon, 05 Aug 2024US$5.5tUS$541.8bUS$120.2b38.2x45.8x10.1x
Wed, 03 Jul 2024US$6.0tUS$530.5bUS$118.1b40.8x51.2x11.4x
Fri, 31 May 2024US$5.1tUS$476.0bUS$106.9b39.1x47.6x10.7x
Sun, 28 Apr 2024US$5.2tUS$476.7bUS$102.7b43.9x50.4x10.9x
Tue, 26 Mar 2024US$5.5tUS$465.8bUS$98.0b45.1x55.8x11.7x
Thu, 22 Feb 2024US$5.2tUS$465.6bUS$92.5b43.6x56.5x11.2x
Sat, 20 Jan 2024US$5.3tUS$486.2bUS$82.1b46.4x64.9x11x
Mon, 18 Dec 2023US$5.1tUS$486.1bUS$82.9b47.3x61.6x10.5x
Wed, 15 Nov 2023US$4.8tUS$482.2bUS$79.6b45.1x60.7x10x
Fri, 13 Oct 2023US$4.6tUS$477.3bUS$73.7b45.1x62.3x9.6x
Sun, 10 Sep 2023US$4.6tUS$476.3bUS$72.9b44.8x63.6x9.7x
Tue, 08 Aug 2023US$4.5tUS$473.0bUS$68.4b48.4x66.2x9.6x
Thu, 06 Jul 2023US$4.5tUS$460.7bUS$60.4b47.7x74.4x9.8x
Sat, 03 Jun 2023US$4.4tUS$459.8bUS$62.0b42.6x70.9x9.6x
Mon, 01 May 2023US$4.0tUS$457.3bUS$62.5b42.2x64.2x8.8x
Price to Earnings Ratio

64.2x


Total Market Cap: US$4.0tTotal Earnings: US$62.5bTotal Revenue: US$457.3bTotal Market Cap vs Earnings and Revenue0%0%0%
U.S. Software Industry Price to Earnings3Y Average 52.5x202420252026
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 39.1x which is lower than its 3-year average PE of 52.5x.
  • The 3-year average PS ratio of 10.7x is higher than the industry's current PS ratio of 9.2x.
Past Earnings Growth
  • The earnings for companies in the Software industry have grown 36% per year over the last three years.
  • Revenues for these companies have grown 13% 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 Market0.69%
Tech1.96%
Software-1.08%
Systems Software-1.07%
Application Software-1.11%
Industry PE
  • Investors are most optimistic about the Application Software industry which is trading above its 3-year average PE ratio of 28.6x.
    • Analysts are expecting annual earnings growth of 25.9%, which is higher than its past year's earnings growth of 17.2% per year.
  • Investors are most pessimistic about the Systems Software industry, which is trading below its 3-year average of 39.6x.
Forecasted Growth
  • Analysts are most optimistic on the Application Software industry, expecting annual earnings growth of 26% over the next 5 years.
  • This is better than its past earnings growth rate of 17% per year.
  • 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
MSTR StrategyUS$172.4715.8%
+US$8.1b		-50.8%PS125.1x
CRWD CrowdStrike HoldingsUS$445.396.5%
+US$7.3b		7.6%PS23.6x
PANW Palo Alto NetworksUS$173.213.7%
+US$5.1b		-1.6%PE109.6x
SNPS SynopsysUS$456.853.6%
+US$3.0b		4.1%PE79.2x
CDNS Cadence Design SystemsUS$314.332.4%
+US$2.0b		11.6%PE78.3x

Latest News

CRWD
US$445.39
CrowdStrike Holdings
7D
6.5%
1Y
7.6%
ADBE
US$238.98
Adobe
7D
-3.7%
1Y
-33.8%
NOW
US$84.78
ServiceNow
7D
-12.1%
1Y
-54.8%
PLTR
US$141.57
Palantir Technologies
7D
-0.8%
1Y
31.4%

Palantir: AI No Longer A Differentiator

Apr 23
MSFT
US$415.75
Microsoft
7D
-1.1%
1Y
7.3%

Microsoft Stock Is Cheap Into Earnings

Apr 23
WDAY
US$114.67
Workday
7D
-8.2%
1Y
-51.6%

WDAY: Returning Leader And AI Investments Will Reshape Post Guidance Reset Phase

Analysts have trimmed the Workday fair value estimate by about $2 to $179.22, citing a broad reset in price targets as they weigh slower sales trends, softer guidance, increased AI investment, and leadership changes against updated profit margin and P/E assumptions. Analyst Commentary Recent Street research on Workday reflects a wide reset in expectations, with price targets moving lower across almost all firms and ratings now spread across Buy or Overweight, Neutral or Hold, and In Line or Market Perform.
ZM
US$90.01
Zoom Communications
7D
3.8%
1Y
19.2%

ZM: AI Integration And Anthropic Stake Are Expected To Support Steady Outlook

Analysts have made only modest adjustments to Zoom Communications' price targets, with figures now ranging from about $74 to $115, as they factor in recent Q4 execution, the Claude Cowork launch, and the potential impact of the Anthropic investment on future growth drivers and margins. Analyst Commentary Recent research on Zoom Communications reflects a split view, with some analysts focusing on AI driven upside and execution, while others question how the company stacks up against faster growing software peers.
IREN
US$52.02
IREN
7D
9.1%
1Y
725.7%

IREN: Hyperscaler Ambitions Vs. $6 Billion Dilution Risk

Apr 21
MSTR
US$172.47
Strategy
7D
15.8%
1Y
-50.8%
ORCL
US$176.28
Oracle
7D
-1.2%
1Y
28.2%

ORCL: AI Data Center Expansion And Financing Will Drive Future Upside

Analysts have trimmed the Oracle price target by about $11 to reflect slightly higher discounting, lower projected profit margins and a modestly lower future P/E multiple, even as revenue growth expectations are supported by recent Q3 beats, raised long term revenue goals and broadly constructive research commentary. Analyst Commentary Street research on Oracle clusters around strong Q3 execution, rising long term cloud ambitions and a reset in valuation assumptions after a sharp selloff.
DDOG
US$127.86
Datadog
7D
3.6%
1Y
28.4%

DDOG: AI Observability And Anthropic Tie Ins Will Drive Multiple Re Rating

Datadog's updated price target edges slightly lower, reflecting a broad wave of target cuts from multiple firms as analysts factor in modest adjustments to discount rates and P/E assumptions, while still citing supportive views on revenue growth, profit margins, AI observability demand, and recent upgrades and initiations. Analyst Commentary Street research on Datadog has leaned more cautious on price targets recently, but there is still a visible group of bullish analysts highlighting product strength, AI observability exposure, and execution on growth initiatives.
SNPS
US$456.85
Synopsys
7D
3.6%
1Y
4.1%

SNPS: Early Ansys Synergies And Activist Pressure Are Expected To Unlock Value

Analysts have trimmed their price targets on Synopsys, with the model fair value easing by about $4 to $533.52 as they factor in slower electronic design automation momentum, a "transition year" around the Ansys integration, and less clarity on near term profitability despite earlier than planned cost synergies. Analyst Commentary Recent research highlights a mixed setup for Synopsys as you think about valuation, integration execution, and growth visibility around both electronic design automation and design IP.
CRM
US$173.30
Salesforce
7D
-4.4%
1Y
-34.5%

CRM: Debt-Funded Buybacks Will Support AI Execution And Margin Discipline

The analyst price target for Salesforce has been reduced by about $50 to reflect slightly lower modeled fair value, a higher discount rate, more conservative assumptions on revenue growth and profit margins, and a trimmed future P/E multiple, in line with a broad set of recent price target cuts that cite softer organic growth, sector multiple compression, and a wait for clearer payoff from Agentforce-driven AI products. Analyst Commentary Street research around Salesforce has shifted toward tighter valuation assumptions, but it also highlights a set of execution and product drivers that bullish analysts see as underappreciated.
CDNS
US$314.33
Cadence Design Systems
7D
2.4%
1Y
11.6%
PANW
US$173.21
Palo Alto Networks
7D
3.7%
1Y
-1.6%
APP
US$454.17
AppLovin
7D
-2.6%
1Y
69.5%

APP: Ongoing Buybacks And Strong 2026 Guidance Will Support Further Upside

Analysts have trimmed their average price target for AppLovin slightly, by about $5 per share. This reflects updated assumptions around fair value, discount rate, revenue growth, profit margin, and future P/E that remain broadly consistent with prior views.