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U.S. Software Industry Analysis

UpdatedAug 04, 2026
DataAggregated Company Financials
Companies423
  • 7D15.5%
  • 3M12.1%
  • 1Y-13.4%
  • YTD-1.9%

In the last week, the Software industry is up 16%, with Microsoft up 24%. Meanwhile, Fair Isaac actually underperformed within the industry, shrinking 22% in the last week. In contrast, the industry has lost 13% in the last 12 months. As for the next few years, earnings are expected to grow by 20% per annum.

Industry Valuation and Performance

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

DateMarket CapRevenueEarningsPEAbsolute PEPS
Tue, 04 Aug 2026US$6.6tUS$708.8bUS$143.3b29.9x45.7x9.2x
Thu, 02 Jul 2026US$5.7tUS$697.7bUS$156.3b28x36.6x8.2x
Sat, 30 May 2026US$6.4tUS$689.9bUS$156.3b29.3x40.8x9.2x
Mon, 27 Apr 2026US$5.9tUS$668.8bUS$157.2b30.5x37.8x8.9x
Wed, 25 Mar 2026US$5.6tUS$668.3bUS$162.0b28.3x34.8x8.4x
Fri, 20 Feb 2026US$5.7tUS$660.9bUS$163.6b25.8x34.6x8.6x
Sun, 18 Jan 2026US$6.7tUS$648.9bUS$159.8b31.6x41.9x10.3x
Tue, 16 Dec 2025US$7.1tUS$645.9bUS$164.8b32.4x43.2x11x
Thu, 13 Nov 2025US$7.5tUS$640.5bUS$158.5b32.1x47.4x11.7x
Sat, 11 Oct 2025US$7.9tUS$621.4bUS$151.7b34.8x52x12.7x
Mon, 08 Sep 2025US$7.3tUS$618.2bUS$151.4b35.8x48.2x11.8x
Wed, 06 Aug 2025US$7.6tUS$610.7bUS$147.7b38.9x51.7x12.5x
Fri, 04 Jul 2025US$7.4tUS$598.9bUS$131.3b43x56.4x12.4x
Sun, 01 Jun 2025US$6.8tUS$594.2bUS$131.7b36.8x51.4x11.4x
Tue, 29 Apr 2025US$5.9tUS$581.3bUS$131.8b31.7x45x10.2x
Thu, 27 Mar 2025US$6.1tUS$582.2bUS$131.6b29x46.1x10.4x
Sat, 22 Feb 2025US$6.4tUS$580.0bUS$129.9b38.2x49x11x
Mon, 20 Jan 2025US$6.4tUS$569.2bUS$129.3b40.8x49.8x11.3x
Wed, 18 Dec 2024US$6.8tUS$569.1bUS$128.8b42x52.8x12x
Fri, 15 Nov 2024US$6.5tUS$566.7bUS$127.0b42.2x51.3x11.5x
Sun, 13 Oct 2024US$6.1tUS$551.7bUS$124.1b40.4x48.9x11x
Tue, 10 Sep 2024US$5.7tUS$551.3bUS$123.1b35.7x46.1x10.3x
Thu, 08 Aug 2024US$5.4tUS$547.6bUS$121.7b37x44.7x9.9x
Sat, 06 Jul 2024US$6.1tUS$530.5bUS$118.1b40.9x51.6x11.5x
Mon, 03 Jun 2024US$5.1tUS$476.0bUS$106.9b39.8x47.8x10.7x
Wed, 01 May 2024US$5.0tUS$476.8bUS$102.4b42.2x48.7x10.5x
Fri, 29 Mar 2024US$5.4tUS$465.9bUS$98.2b45.1x55.1x11.6x
Sun, 25 Feb 2024US$5.3tUS$466.5bUS$93.1b43.9x57.1x11.4x
Tue, 23 Jan 2024US$5.4tUS$486.2bUS$82.1b46.8x65.7x11.1x
Thu, 21 Dec 2023US$5.2tUS$486.1bUS$82.9b43.9x62.2x10.6x
Sat, 18 Nov 2023US$4.9tUS$482.4bUS$79.8b45.3x62x10.3x
Mon, 16 Oct 2023US$4.5tUS$477.3bUS$73.7b44.3x61.3x9.5x
Wed, 13 Sep 2023US$4.7tUS$476.3bUS$73.0b45x64.2x9.8x
Fri, 11 Aug 2023US$4.4tUS$473.0bUS$69.9b45.7x63.4x9.4x
Price to Earnings Ratio

63.4x


Total Market Cap: US$4.4tTotal Earnings: US$69.9bTotal Revenue: US$473.0bTotal Market Cap vs Earnings and Revenue0%0%0%
U.S. Software Industry Price to Earnings3Y Average 49.5x202420252026
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 45.7x which is lower than its 3-year average PE of 49.5x.
  • The 3-year average PS ratio of 10.6x 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 27% 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 Market2.39%
Tech4.03%
Software15.51%
Systems Software20.37%
Application Software2.79%
Industry PE
  • Investors are most optimistic about the Systems Software industry even though it's trading below its 3-year average PE ratio of 38.3x.
    • Analysts are expecting annual earnings growth of 17.5%, which is lower than the prior year's growth of 21.2% per year.
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
MSFT MicrosoftUS$487.6524.0%
+US$699.1b		-7.6%PE27.1x
ORCL OracleUS$141.8518.2%
+US$63.1b		-44.5%PE24.1x
PANW Palo Alto NetworksUS$347.138.8%
+US$22.9b		105.3%PE335.6x
CRWD CrowdStrike HoldingsUS$202.5411.4%
+US$21.1b		83.4%PS40.5x
NBIS Nebius GroupUS$212.5825.3%
+US$11.0b		285.3%PE74x

Latest News

ORCL
US$141.85
Oracle
7D
18.2%
1Y
-44.5%
PANW
US$347.13
Palo Alto Networks
7D
8.8%
1Y
105.3%
VRNS
US$41.18
Varonis Systems
7D
-7.8%
1Y
-25.2%
CRWD
US$202.54
CrowdStrike Holdings
7D
11.4%
1Y
83.4%
ADSK
US$234.71
Autodesk
7D
-1.1%
1Y
-21.6%
PLTR
US$125.65
Palantir Technologies
7D
1.7%
1Y
-27.5%
Seeking Alpha • 21h

Palantir: Estimates Blown Away, Shares Soar (Rating Upgrade)

Summary Palantir Technologies Inc. delivered a fifth consecutive double beat, with Q2 revenues up 94% and EPS 17% above consensus. PLTR's US revenue surged 115% year-over-year, driven by both government and commercial segments, with commercial growth nearing 150%. Operating margin expanded to 62%, up 1,600 bps YoY, underpinned by strong operating leverage. I upgrade PLTR stock to Buy, as the combination of accelerating growth, margin expansion, and a lower valuation creates an attractive long-term entry. Read the full article on Seeking Alpha
CHKP
US$122.97
Check Point Software Technologies
7D
-10.7%
1Y
-34.9%
Narrative Update • Aug 03

CHKP: AI Security Demand And New Products Will Drive Future Repricing

Analysts trimmed their blended fair value estimate for Check Point Software Technologies by about $4.56 to $185.19. This reflects a mix of reduced price targets tied to near term execution risk and softer firewall demand, alongside a few upward revisions that point to a healthier long term pipeline and AI related opportunities.
FTNT
US$163.21
Fortinet
7D
8.8%
1Y
69.6%
Narrative Update • Aug 03

FTNT: AI Hardware Cycle And Demand Uncertainty Will Pressure Future Returns

Fortinet's updated fair value estimate rises from $77.37 to $92.30 as analysts lift price targets across the board, citing stronger Q2 billings and product trends, improved profitability assumptions, and expanding demand for AI driven security and networking. Analyst Commentary Wall Street research on Fortinet has turned more constructive on near term fundamentals, with many firms raising price targets after the Q2 report.
NBIS
US$212.58
Nebius Group
7D
25.3%
1Y
285.3%
Seeking Alpha • Aug 03

Nebius: Too Cheap To Ignore

Summary Nebius is poised for expansion, with potential data center deployment in India signaling increased growth beyond its current North America, Europe, and Israel footprint. Recent job postings in India suggest Nebius may exceed its current 2030 guidance of 5 GW, possibly reaching over 7 GW in capacity. Nvidia’s 9.3% stake in Nebius enhances technology access and customer security, though the stake is tied to warrants from March and cannot be sold before September 2026. Despite shifting to a net debt position in Q2, Nebius’s asset-backed financing and strong contract backlog ($40B from MSFT and META) support ongoing capital-intensive growth. Read the full article on Seeking Alpha
TYL
US$305.54
Tyler Technologies
7D
-8.3%
1Y
-49.8%
Seeking Alpha • Aug 03

Tyler Technologies: Not The Best Software Buy In Today's Market (Rating Downgrade)

Summary Tyler Technologies remains overvalued despite a ~30% YTD decline and underwhelming Q2 results. TYL's 8.2% revenue growth missed expectations, with decelerating topline and falling adjusted EBITDA margins. AI initiatives and record bookings have not translated into accelerating growth or profit expansion for TYL. I recommend a sell rating on TYL due to premium valuation, limited greenfield opportunity, and better alternatives in the software sector. Read the full article on Seeking Alpha
MSFT
US$487.65
Microsoft
7D
24.0%
1Y
-7.6%
Seeking Alpha • Aug 02

Microsoft: The Turnaround Is Finally Accelerating

Summary I'm keeping Microsoft as a Strong Buy rating, as Azure's 43% growth and robust cloud momentum validate its monetization thesis, while silencing the skeptics resoundingly. MSFT's understated end-to-end stack, including cybersecurity and AI partnerships, positions it ahead of hyperscaler and SaaS rivals for further AI monetization as AI agents take off. MSFT Copilot seats rose to 30 million, but with 400 million potential, significant monetization runway remains the narrative to underpin Microsoft's bullish game. Valuation at 24x is still well below the five-year average, while strong free cash flow margins support aggressive CapEx and strategic flexibility. The market has gotten its pessimism wrong on Microsoft as it sold off software stocks indiscriminately. Do not waste this opportunity to get on board before it climbs back to its all-time highs. Read the full article on Seeking Alpha
CRCL
US$60.35
Circle Internet Group
7D
-6.2%
1Y
-60.8%
DDOG
US$273.60
Datadog
7D
9.1%
1Y
105.8%
FICO
US$1,045.46
Fair Isaac
7D
-21.8%
1Y
-22.2%
Narrative Update • Jul 30

FICO: Mortgage Score Headwinds Will Ultimately Support Future Upside Potential

Analysts have trimmed the Fair Isaac price target by about $40 to roughly $1,512, as they factor in softer mortgage score trends, pending Direct Licensing Program approvals, and a lower assumed future P/E multiple. Analyst Commentary Recent Street research on Fair Isaac highlights a split view on the stock, with some bullish analysts focusing on execution in software and earnings delivery, while more cautious analysts focus on mortgage credit trends, valuation, and regulatory timing for key programs.
CDNS
US$336.15
Cadence Design Systems
7D
-2.5%
1Y
-6.8%
Narrative Update • Jul 30

CDNS: Agentic AI Engineer And Hardware Strength Will Support Future Upside

Analysts have nudged their fair value estimate for Cadence Design Systems higher from $450 to $470 as they weigh stronger AI and hardware demand, raised guidance, and a growing addressable market against questions around AI monetization, margin pressure, and a still elevated future P/E profile. Analyst Commentary Recent commentary on Cadence Design Systems points to a generally constructive tone from bullish analysts, even as they highlight valuation and margin questions.
ACIW
US$57.37
ACI Worldwide
7D
-4.3%
1Y
38.1%