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U.S. Software Industry Analysis

UpdatedAug 09, 2026
DataAggregated Company Financials
Companies422
  • 7D9.0%
  • 3M15.4%
  • 1Y-8.6%
  • YTD2.6%

Over the last 7 days, the Software industry has risen 9.0%, driven by gains from Microsoft of 7.6%. In the same time, Datadog was down 13%. In the past year, the industry is down 8.6%. 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
Sun, 09 Aug 2026US$6.9tUS$711.4bUS$142.7b32.5x48x9.6x
Tue, 07 Jul 2026US$5.9tUS$699.4bUS$156.4b28.5x37.8x8.4x
Thu, 04 Jun 2026US$6.7tUS$691.4bUS$155.7b29x42.9x9.7x
Sat, 02 May 2026US$5.8tUS$681.1bUS$162.7b30.3x35.6x8.5x
Mon, 30 Mar 2026US$5.2tUS$668.4bUS$161.9b28.2x32x7.7x
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
Price to Earnings Ratio

63.1x


Total Market Cap: US$4.4tTotal Earnings: US$70.2bTotal Revenue: US$473.1bTotal Market Cap vs Earnings and Revenue0%0%0%
U.S. Software Industry Price to Earnings3Y Average 49.4x202420252026
Current Industry PE
  • Investors are relatively neutral on the American Software industry at the moment, indicating that they anticipate long term growth rates to remain steady.
  • The industry is trading close to its 3-year average PE ratio of 49.4x.
  • The industry is trading close to its 3-year average PS ratio of 10.6x.
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 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 Market4.18%
Tech7.72%
Software9.02%
Application Software11.49%
Systems Software8.19%
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 roughly in line with its past earnings growth rate.
  • 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$499.997.6%
+US$261.9b		-4.2%PE27.8x
PLTR Palantir TechnologiesUS$172.0139.8%
+US$118.3b		-8.0%PE137x
ORCL OracleUS$147.0213.2%
+US$49.4b		-41.2%PE24.9x
PANW Palo Alto NetworksUS$363.869.7%
+US$26.1b		117.8%PE351.8x
CRWD CrowdStrike HoldingsUS$214.4212.3%
+US$24.0b		102.0%PS42.9x

Latest News

DDOG
US$233.93
Datadog
7D
-12.7%
1Y
78.7%
Seeking Alpha • 3h

Datadog: Best Of Breed For Multiple Reasons

Summary Datadog remains a standout software stock, outperforming peers and benefiting from the AI-driven infrastructure boom. DDOG's usage-based pricing, especially through expanded AI credits and the Bits AI platform, drives robust net revenue retention above 120%. Despite strong Q2 results and raised revenue guidance, DDOG shares have dipped over 10%, creating a tactical buying opportunity. I reiterate my buy conviction on DDOG, citing relentless growth, strong upsell trends, and premium valuation justified by execution. Read the full article on Seeking Alpha
PANW
US$363.86
Palo Alto Networks
7D
9.7%
1Y
117.8%
MSFT
US$499.99
Microsoft
7D
7.6%
1Y
-4.2%
Seeking Alpha • Aug 08

Microsoft Corporation: A Buy And Hold Forever Type Of Stock

Summary Microsoft Corporation remains a strong buy, especially on modest pullbacks, given its history of growth and cash flow generation. Microsoft's recent rally followed an earnings call that dispelled over-pessimism, with the stock outperforming the market by approximately 14% since the last upgrade. Cloud revenue acceleration and an overlooked gaming segment are driving near-term upside, while valuation remains attractive relative to historical highs. Key risks include shifting investor sentiment and rising capex, but Microsoft's dominant market position and upcoming investment payoffs support a long-term hold. Read the full article on Seeking Alpha
NOW
US$124.88
ServiceNow
7D
12.3%
1Y
-28.4%
TEAM
US$149.07
Atlassian
7D
47.6%
1Y
-11.3%
Narrative Update • Aug 07

TEAM: Execution And Business Model Shifts Will Pressure Long-Term Stock Outlook

Analysts have raised their fair value estimate for Atlassian to $99 from $95, reflecting updated inputs on the discount rate, expected revenue growth, profit margins, and future P/E assumptions. Analyst Commentary on Atlassian Recent valuation work on Atlassian sits against a backdrop of more cautious commentary seen in other parts of the market, particularly in areas tied to energy transition and hardware heavy business models.
PLTR
US$172.01
Palantir Technologies
7D
39.8%
1Y
-8.0%
HUT
US$88.59
Hut 8
7D
-17.7%
1Y
355.4%
Analysis Article • Aug 07

Things Look Grim For Hut 8 Corp. (NASDAQ:HUT) After Today's Downgrade

Today is shaping up negative for Hut 8 Corp. ( NASDAQ:HUT ) shareholders, with the analysts delivering a substantial...
CRM
US$192.74
Salesforce
7D
4.7%
1Y
-19.9%
NBIS
US$187.97
Nebius Group
7D
-1.3%
1Y
173.3%
KVYO
US$16.62
Klaviyo
7D
-6.8%
1Y
-48.6%
Narrative Update • Aug 06

KVYO: AI Investments And Agency Deal Will Support Future Multiple Repricing

The Klaviyo analyst fair value estimate has been revised down from $29.23 to $26.70 as analysts adjust their price targets lower following mixed Q2 results, softer margin outlooks, and updated assumptions for future P/E multiples. Analyst Commentary Recent research on Klaviyo shows a cluster of price target cuts following Q2 results, even as many firms keep positive ratings.
HUBS
US$210.45
HubSpot
7D
-11.3%
1Y
-53.2%
Narrative Update • Aug 06

HUBS: AI Pivot And Longer Sales Cycles Set Up Future Upside

HubSpot's updated analyst price target has shifted lower to about $318 from about $408, as analysts factor in softer near term revenue growth expectations, longer sales cycles and heightened AI related competitive and budget risks, alongside slightly stronger profit margin assumptions and a lower future P/E multiple. Analyst Commentary Recent commentary on HubSpot shows a clear reset in expectations, but it also highlights where bullish analysts still see support for the stock based on execution, product direction and valuation.
FTNT
US$159.64
Fortinet
7D
-1.4%
1Y
114.6%
Seeking Alpha • Aug 06

Downgrading Fortinet: Key Factors For My Hold Recommendation

Summary Fortinet is downgraded to Hold after a strong run, with valuation concerns outweighing near-term catalysts. FTNT's hardware firewall upgrade cycle, Unified SASE adoption, and AI/OT security expansion drove robust revenue, margin, and FCF growth. Unified SASE billings grew 35% and FortiSASE billings over 100%, signaling traction in high-margin, recurring revenue streams. Valuation appears stretched; future upside depends on sustaining operating leverage, FCF growth, and capturing AI/OT security opportunities. Read the full article on Seeking Alpha
CRWD
US$214.42
CrowdStrike Holdings
7D
12.3%
1Y
102.0%
ORCL
US$147.02
Oracle
7D
13.2%
1Y
-41.2%
Narrative Update • Aug 05

ORCL: Heavy AI Buildout And Backlog Versus Funding And Margin Pressures

Oracle's updated analyst price target has moved from a prior fair value reference of $155.00 to $137.60, as analysts factor in slightly higher discount rates, a lower assumed future P/E of about 15.3, and ongoing debate around cloud growth, capital needs, and earnings power highlighted in recent research coverage. Analyst Commentary Recent research on Oracle shows a wide range of opinions, especially around cloud growth, capital intensity and how those factors feed into valuation.
FICO
US$1,041.40
Fair Isaac
7D
-7.3%
1Y
-21.2%
CIFR
US$17.18
Cipher Digital
7D
-23.0%
1Y
261.7%
Narrative Update • Aug 04

CIFR: Long Duration AI Leases And AWS Deal Will Reprice Post Mining Cash Flows

Analysts now see Cipher Digital's fair value edging up from $32.00 to about $32.79, citing strong interest in its high performance computing colocation pipeline and hyperscaler leasing activity as key factors supporting their updated price targets. Analyst Commentary Recent research coverage on Cipher Digital centers on how the stock reflects its high performance computing and bitcoin mining mix, power access, and leasing pipeline.