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U.S. Software Industry Analysis

UpdatedJun 30, 2026
DataAggregated Company Financials
Companies432
  • 7D-0.3%
  • 3M5.3%
  • 1Y-22.5%
  • YTD-18.0%

Last week, the Software industry hasn't moved much but Palo Alto Networks is up 16% in that time. As for the longer term, the industry has declined 23% in the last year. Looking forward, earnings are forecast to grow by 20% annually.

Industry Valuation and Performance

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

DateMarket CapRevenueEarningsPEAbsolute PEPS
Tue, 30 Jun 2026US$5.6tUS$697.7bUS$156.3b27.2x35.9x8x
Thu, 28 May 2026US$6.2tUS$687.3bUS$155.3b29.2x39.9x9x
Sat, 25 Apr 2026US$5.9tUS$668.8bUS$157.2b30.5x37.5x8.8x
Mon, 23 Mar 2026US$5.6tUS$668.3bUS$162.0b29.4x34.4x8.3x
Wed, 18 Feb 2026US$5.7tUS$660.3bUS$164.1b25.4x34.7x8.6x
Fri, 16 Jan 2026US$6.8tUS$648.9bUS$159.8b32.4x42.5x10.5x
Sun, 14 Dec 2025US$7.1tUS$645.9bUS$164.8b32.9x43.2x11x
Tue, 11 Nov 2025US$7.5tUS$640.0bUS$159.1b32.5x47.2x11.7x
Thu, 09 Oct 2025US$7.8tUS$621.4bUS$151.8b36x51.6x12.6x
Sat, 06 Sep 2025US$7.3tUS$618.2bUS$151.4b35.8x48.4x11.9x
Mon, 04 Aug 2025US$7.6tUS$611.0bUS$146.9b39.7x51.4x12.4x
Wed, 02 Jul 2025US$7.2tUS$599.0bUS$131.2b42.2x55.1x12.1x
Fri, 30 May 2025US$6.7tUS$594.0bUS$131.7b36.4x51.1x11.3x
Sun, 27 Apr 2025US$5.9tUS$581.1bUS$131.9b32x45x10.2x
Tue, 25 Mar 2025US$5.9tUS$582.9bUS$131.1b29.9x45.3x10.2x
Thu, 20 Feb 2025US$6.6tUS$588.2bUS$130.0b42.2x50.8x11.2x
Sat, 18 Jan 2025US$6.4tUS$569.2bUS$129.3b40.8x49.5x11.3x
Mon, 16 Dec 2024US$6.7tUS$569.1bUS$128.8b41.2x51.8x11.7x
Wed, 13 Nov 2024US$6.4tUS$567.1bUS$123.7b41.2x52.1x11.4x
Fri, 11 Oct 2024US$6.0tUS$551.6bUS$124.1b37.7x48.7x10.9x
Sun, 08 Sep 2024US$5.6tUS$551.3bUS$123.1b34.9x45.6x10.2x
Tue, 06 Aug 2024US$5.5tUS$541.8bUS$120.2b37x45.8x10.2x
Thu, 04 Jul 2024US$6.1tUS$530.5bUS$118.1b41.3x51.6x11.5x
Sat, 01 Jun 2024US$5.1tUS$475.9bUS$106.9b39.8x47.6x10.7x
Mon, 29 Apr 2024US$5.2tUS$476.7bUS$102.7b43.9x50.4x10.9x
Wed, 27 Mar 2024US$5.4tUS$465.8bUS$98.0b45.1x55.4x11.7x
Fri, 23 Feb 2024US$5.2tUS$466.1bUS$92.8b42.8x55.9x11.1x
Sun, 21 Jan 2024US$5.3tUS$486.2bUS$82.1b46.4x64.9x11x
Tue, 19 Dec 2023US$5.1tUS$486.1bUS$82.9b44.7x61.6x10.5x
Thu, 16 Nov 2023US$4.9tUS$482.1bUS$79.5b45.1x61.8x10.2x
Sat, 14 Oct 2023US$4.5tUS$477.3bUS$73.7b44.3x61.3x9.5x
Mon, 11 Sep 2023US$4.6tUS$476.3bUS$72.9b44.8x63.6x9.7x
Wed, 09 Aug 2023US$4.5tUS$473.3bUS$68.6b47.2x65x9.4x
Fri, 07 Jul 2023US$4.5tUS$460.7bUS$60.4b47.2x74.3x9.7x
Price to Earnings Ratio

74.3x


Total Market Cap: US$4.5tTotal Earnings: US$60.4bTotal Revenue: US$460.7bTotal Market Cap vs Earnings and Revenue0%0%0%
U.S. Software Industry Price to Earnings3Y Average 50.7x202420252026
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 35.9x which is lower than its 3-year average PE of 50.7x.
  • The 3-year average PS ratio of 10.6x is higher than the industry's current PS ratio of 8.0x.
Past Earnings Growth
  • The earnings for companies in the Software industry have grown 37% 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 Market0.31%
Tech-1.87%
Software-0.33%
Application Software2.09%
Systems Software-1.26%
Industry PE
  • Investors are most optimistic about the Application Software industry which is trading above its 3-year average PE ratio of 57.1x.
    • Analysts are expecting annual earnings growth of 26.6%, which is higher than its past year's earnings growth of 10.8% per year.
  • Investors are most pessimistic about the Systems Software industry, which is trading below its 3-year average of 38.8x.
Forecasted Growth
  • Analysts are most optimistic on the Application Software industry, expecting annual earnings growth of 27% over the next 5 years.
  • This is better than its past earnings growth rate of 11% per year.
  • 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
PANW Palo Alto NetworksUS$332.0015.9%
+US$37.2b		62.2%PE321x
CRWD CrowdStrike HoldingsUS$742.919.1%
+US$15.8b		51.0%PS37.1x
DDOG DatadogUS$248.5712.7%
+US$10.0b		87.8%PE652.2x
APP AppLovinUS$498.766.3%
+US$9.9b		42.5%PE42.8x
NOW ServiceNowUS$99.977.5%
+US$7.2b		-51.4%PE58.7x

Latest News

MSFT
US$368.57
Microsoft
7D
-1.4%
1Y
-25.1%
Seeking Alpha • 6h

Microsoft: When Uncertainty Rules, Even Attractive Valuations Don't Matter

Summary Deterioration in investors' sentiment towards Microsoft and hyperscalers more broadly is justified given the current level of uncerntainty. While MSFT margins remain robust, there are some early warning signs when it comes to profitability in the cloud segment for FY 2027. The race to the bottom in terms of capital expenditure increases adds another layer of uncertainty to future profitability. At present, MSFT trades at a significant discount on a time-series basis once we account for current margins, but that alone does not justify a Buy rating. Read the full article on Seeking Alpha
NBIS
US$261.15
Nebius Group
7D
-7.9%
1Y
372.0%
Seeking Alpha • 9h

Nebius: A Bigger Question Behind The Growth

Summary Nebius is pursuing hyperscaler contracts at low or negative margins to fund global network buildout, aiming to become a public cloud hyperscaler. NBIS's Q1'26 revenue surged to $399M, driven by Meta and Microsoft contracts, but margins remain weak when including depreciation and product development costs. Management targets medium-term EBIT margins of 20–30%+ via a pivot to value-added AI cloud services, but current profitability is elusive and competition is intense. I maintain a Hold rating, as NBIS appears fully valued even under optimistic margin and growth scenarios, with significant execution and competitive risks. Read the full article on Seeking Alpha
PLTR
US$115.70
Palantir Technologies
7D
-0.9%
1Y
-11.5%
MSTR
US$92.68
Strategy
7D
-10.7%
1Y
-75.2%
SNPS
US$447.26
Synopsys
7D
-3.7%
1Y
-12.8%
ORCL
US$147.76
Oracle
7D
-15.6%
1Y
-32.4%
Analysis Article • Jun 29

We Think That There Are Issues Underlying Oracle's (NYSE:ORCL) Earnings

Investors were disappointed with Oracle Corporation's ( NYSE:ORCL ) earnings, despite the strong profit numbers. We...
CRM
US$157.93
Salesforce
7D
5.2%
1Y
-42.1%
Narrative Update • Jun 29

CRM: AI And M&A Execution Will Support Post 2027 Upside

Salesforce's updated fair value estimate has been trimmed by about $7 to $248. Analysts are balancing softer growth expectations and lower forecast P/E multiples with ongoing confidence in the company's AI initiatives, margin profile, and cash generation.
APP
US$498.76
AppLovin
7D
6.3%
1Y
42.5%
FTNT
US$155.42
Fortinet
7D
5.0%
1Y
51.7%
IREN
US$45.91
IREN
7D
-16.1%
1Y
201.4%
DDOG
US$248.57
Datadog
7D
12.7%
1Y
87.8%
CRWD
US$742.91
CrowdStrike Holdings
7D
9.1%
1Y
51.0%
NOW
US$99.97
ServiceNow
7D
7.5%
1Y
-51.4%
Narrative Update • Jun 28

NOW: AI Partnerships And Margin Pressure Will Constrain Long Term Upside

Analysts have revised their fair value estimate for ServiceNow to $85.00. This reflects updated assumptions around the discount rate, revenue growth, profit margin, and future P/E that collectively point to a more conservative price target framework.
PANW
US$332.00
Palo Alto Networks
7D
15.9%
1Y
62.2%
ADBE
US$206.43
Adobe
7D
4.6%
1Y
-47.4%
CDNS
US$372.72
Cadence Design Systems
7D
-1.7%
1Y
20.4%
Seeking Alpha • Jun 23

Cadence Design Systems: The Market Is Paying Up, But The Earnings Path Still Works

Summary I rate Cadence Design Systems a Buy with a $460 price target, reflecting 37% upside potential from the current level of $379. My growth drivers are agentic AI inside core EDA, semiconductor IP tied to memory and interconnect, SDA after Hexagon, and steady EPS support from buybacks and acquisition accretion. I assume these growth drivers can support the EPS to move from the current $7.90 to a 2028 adjusted EPS estimate of $10.07. I arrive at my price target by applying the 5-year forward non-GAAP P/E average multiple to my 2028 adjusted EPS estimate of $10.07. The main risk is valuation sensitivity because CDNS is already priced as a premium company, but I believe the backlog, management’s projected 17% revenue growth, strong margins, and AI-driven design demand still support the Buy rating. Read the full article on Seeking Alpha