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U.S. Software Industry Analysis

UpdatedFeb 25, 2026
DataAggregated Company Financials
Companies426
  • 7D-2.7%
  • 3M-22.5%
  • 1Y-12.3%
  • YTD-21.1%

Over the last 7 days, the Software industry has dropped 2.7%, driven by a pullback from Microsoft of 2.0%. However, the industry is down 12% over the past year. 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
Wed, 25 Feb 2026US$5.4tUS$661.1bUS$162.9b24.2x33x8.1x
Fri, 23 Jan 2026US$6.5tUS$649.0bUS$159.9b30.5x40.8x10x
Sun, 21 Dec 2025US$7.2tUS$645.4bUS$164.7b32.4x43.6x11.1x
Tue, 18 Nov 2025US$7.4tUS$641.1bUS$159.9b30.8x46x11.5x
Thu, 16 Oct 2025US$7.8tUS$621.4bUS$151.7b34.9x51.2x12.5x
Sat, 13 Sep 2025US$7.7tUS$620.9bUS$151.9b34.9x50.6x12.4x
Mon, 11 Aug 2025US$7.6tUS$614.0bUS$150.0b37.7x50.5x12.3x
Wed, 09 Jul 2025US$7.4tUS$598.9bUS$131.3b43.8x56.2x12.3x
Fri, 06 Jun 2025US$6.8tUS$595.6bUS$131.6b39.5x52x11.5x
Sun, 04 May 2025US$6.4tUS$589.0bUS$131.0b33.5x48.9x10.9x
Tue, 01 Apr 2025US$5.7tUS$582.3bUS$130.7b29.3x43.7x9.8x
Thu, 27 Feb 2025US$6.2tUS$581.2bUS$128.6b35.2x48.1x10.6x
Sat, 25 Jan 2025US$6.7tUS$568.2bUS$129.2b42.3x52.1x11.8x
Mon, 23 Dec 2024US$6.6tUS$569.1bUS$128.8b40.8x51.1x11.6x
Wed, 20 Nov 2024US$6.3tUS$566.7bUS$127.1b41x50x11.2x
Fri, 18 Oct 2024US$6.0tUS$551.7bUS$124.1b39.5x48.7x10.9x
Sun, 15 Sep 2024US$6.0tUS$552.4bUS$124.0b38.8x48.2x10.8x
Tue, 13 Aug 2024US$5.6tUS$548.6bUS$121.5b34.3x46.1x10.2x
Thu, 11 Jul 2024US$6.0tUS$530.5bUS$118.1b40.3x51.1x11.4x
Sat, 08 Jun 2024US$5.2tUS$477.7bUS$107.3b39.9x48.9x11x
Mon, 06 May 2024US$5.2tUS$476.8bUS$103.2b42.3x50.1x10.8x
Wed, 03 Apr 2024US$5.4tUS$466.0bUS$98.3b44x55.1x11.6x
Fri, 01 Mar 2024US$5.4tUS$472.1bUS$98.1b43.9x54.6x11.3x
Sun, 28 Jan 2024US$5.4tUS$486.8bUS$82.4b47.4x66.1x11.2x
Tue, 26 Dec 2023US$5.2tUS$486.1bUS$82.9b44.5x62.4x10.6x
Thu, 23 Nov 2023US$5.0tUS$482.4bUS$79.9b44.9x62.4x10.3x
Sat, 21 Oct 2023US$4.4tUS$477.3bUS$73.7b42x60.3x9.3x
Mon, 18 Sep 2023US$4.6tUS$480.1bUS$73.0b45.2x62.5x9.5x
Wed, 16 Aug 2023US$4.4tUS$473.1bUS$70.2b45.1x63.1x9.4x
Fri, 14 Jul 2023US$4.6tUS$460.7bUS$60.1b49.4x76.8x10x
Sun, 11 Jun 2023US$4.3tUS$460.1bUS$62.1b43.1x69.8x9.4x
Tue, 09 May 2023US$4.0tUS$455.5bUS$60.6b38.1x65.5x8.7x
Thu, 06 Apr 2023US$3.9tUS$453.7bUS$60.6b43.5x64x8.5x
Sat, 04 Mar 2023US$3.6tUS$453.1bUS$59.7b43.6x61.1x8x
Price to Earnings Ratio

61.1x


Total Market Cap: US$3.6tTotal Earnings: US$59.7bTotal Revenue: US$453.1bTotal 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 33.0x 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 8.1x.
Past Earnings Growth
  • The earnings for companies in the Software industry have grown 40% 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 Market0.50%
Tech0.54%
Software-2.68%
Application Software-1.03%
Systems Software-3.36%
Industry PE
  • Investors are most optimistic about the Application Software industry which is trading above its 3-year average PE ratio of 9.5x.
    • Analysts are expecting annual earnings growth of 23.4%, 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
APP AppLovinUS$393.224.5%
+US$5.3b		4.3%PE38.6x
SNPS SynopsysUS$440.724.4%
+US$3.6b		-3.8%PE63.1x
CDNS Cadence Design SystemsUS$290.632.5%
+US$3.0b		16.8%PE72.3x
FIG FigmaUS$27.4318.7%
+US$2.9b		n/aPS13.6x
ROP Roper TechnologiesUS$337.707.0%
+US$2.4b		-42.5%PE23.4x

Latest News

MSFT
US$389.00
Microsoft
7D
-2.0%
1Y
-2.2%
ROP
US$337.70
Roper Technologies
7D
7.0%
1Y
-42.5%
PLTR
US$128.84
Palantir Technologies
7D
-3.1%
1Y
46.7%

Palantir: High-Quality AI Infrastructure, but Valuation Leaves Little Room for Error

Palantir’s story is about becoming the decision engine inside complex organisations. While it is often described as an artificial intelligence company, its real strength lies in integrating data, software, and operational workflows into systems that organisations depend on to make critical decisions.
PANW
US$141.67
Palo Alto Networks
7D
-13.4%
1Y
-24.6%

PANW: AI Security Platform Consolidation Will Drive Future Share Repricing

The updated analyst price target for Palo Alto Networks has been reduced to $209.61 from $226.65 as analysts trim valuation multiples and fair value assumptions following Q2 earnings, while many still highlight resilient cybersecurity demand and limited disruption from emerging AI developer tools. Analyst Commentary Street research on Palo Alto Networks has turned more cautious on valuation multiples, even as many firms still flag resilient demand for cybersecurity platforms and limited impact from new AI developer tools such as Claude Code Security.
CDNS
US$290.63
Cadence Design Systems
7D
2.5%
1Y
16.8%
INTU
US$358.71
Intuit
7D
-5.4%
1Y
-35.4%

INTU: AI Adoption And Credit Karma Traction Will Support Future Platform Usage

Our Intuit fair value estimate edges lower to $761.29 from $777.85 as analysts trim price targets into fiscal Q2, citing tougher tax comparisons, a slightly lower assumed future P/E of 40.89, and some caution around execution timing, even as they still highlight potential support from areas like Credit Karma and longer term AI adoption. Analyst Commentary Recent research shows a clear split between bullish and bearish analysts as they reset expectations ahead of fiscal Q2, adjusting targets while debating how much to credit Intuit for AI initiatives, Credit Karma traction, and the tax business setup.
ORCL
US$146.14
Oracle
7D
-5.1%
1Y
-13.3%

ORCL: AI Infrastructure Buildout And Debt Funding Will Drive Future Upside

Analysts have trimmed their average price targets on Oracle by around $20 to $30. The changes reflect recent rating adjustments and revised expectations for fair value, discount rate, revenue growth, profit margins, and future P/E assumptions.
DDOG
US$104.43
Datadog
7D
-14.8%
1Y
-9.2%

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.
SNPS
US$440.72
Synopsys
7D
4.4%
1Y
-3.8%

SNPS: NVIDIA Alliance Will Shape AI Pivot Through 2026 Transition Year

Narrative Update The analyst price target for Synopsys has been trimmed by about $2 to reflect a slightly higher discount rate and a modestly lower fair value, as analysts factor in a tougher 2026 outlook with potential headwinds in EDA, muted IP growth, and limited near term catalysts. Analyst Commentary Recent research points to 2026 as a tougher year for Synopsys, with several firms resetting expectations around growth, risk, and valuation.
ZS
US$149.36
Zscaler
7D
-13.5%
1Y
-22.6%

ZS: Future Returns Will Rely On Zero Trust AI Security Leadership

Narrative Update: Zscaler We trim our Zscaler fair value estimate by about $13 to $304, reflecting lower assumed profit margins and a slightly less aggressive future P/E multiple, while analysts broadly reduce price targets on the stock even as they continue to highlight its Zero Trust leadership, AI security exposure, and potential for earnings beats. Analyst Commentary Recent Street research on Zscaler has shifted toward lower price targets, but most firms still frame the company as a key Zero Trust and AI security player with ongoing execution questions rather than a broken growth story.
IREN
US$45.45
IREN
7D
10.9%
1Y
417.7%

Navigating the Transition Amidst Bitcoin Volatility

Since the January update, the investment thesis for IREN has entered a critical "bridge" phase. While the long-term trajectory toward becoming an AI infrastructure leader remains intact, the company is currently navigating short-term headwinds caused by a dip in Bitcoin prices and the heavy capital costs of its infrastructure pivot.
FIG
US$27.43
Figma
7D
18.7%
1Y
n/a

Figma is still elite

Figma is still strong at the product level. Deeply embedded in modern product teams.
FTNT
US$75.23
Fortinet
7D
-7.9%
1Y
-30.4%
CRWD
US$350.25
CrowdStrike Holdings
7D
-15.5%
1Y
-7.8%

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.
APP
US$393.22
AppLovin
7D
4.5%
1Y
4.3%

APP: Higher 2026 Revenue Outlook And Rich Margins Will Support Upside Potential

Analysts have adjusted their price target on AppLovin to $476.89 from $530.78, citing updated assumptions around revenue growth, profit margins, and future P/E multiples. What's in the News AppLovin issued new earnings guidance for the first quarter of 2026, setting expected total revenue in a range of US$1.745b to US$1.775b (Key Developments).
NBIS
US$102.58
Nebius Group
7D
5.2%
1Y
199.9%

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.