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

U.S. Software Industry Analysis

UpdatedAug 12, 2026
DataAggregated Company Financials
Companies420
  • 7D2.4%
  • 3M18.9%
  • 1Y-8.5%
  • YTD3.7%

In the last week, the Software industry is up 2.4%, with Microsoft up 2.2%. Meanwhile, Datadog actually underperformed within the industry, shrinking 14% in the last week. In contrast, the industry has lost 8.5% 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
Wed, 12 Aug 2026US$7.0tUS$711.6bUS$142.2b31.8x49.1x9.8x
Fri, 10 Jul 2026US$5.8tUS$699.4bUS$156.6b29.3x37.2x8.3x
Sun, 07 Jun 2026US$6.3tUS$692.7bUS$155.4b28.2x40.5x9.1x
Tue, 05 May 2026US$5.9tUS$681.1bUS$162.7b31.6x36.3x8.7x
Thu, 02 Apr 2026US$5.4tUS$668.5bUS$161.9b29.2x33.2x8x
Sat, 28 Feb 2026US$5.7tUS$664.9bUS$163.7b26.4x34.7x8.5x
Mon, 26 Jan 2026US$6.7tUS$649.0bUS$159.9b30.8x41.9x10.3x
Wed, 24 Dec 2025US$7.2tUS$645.4bUS$164.7b31.9x43.8x11.2x
Fri, 21 Nov 2025US$7.1tUS$639.7bUS$159.9b29x44.3x11.1x
Sun, 19 Oct 2025US$7.7tUS$621.4bUS$151.7b34.9x50.8x12.4x
Tue, 16 Sep 2025US$7.7tUS$620.9bUS$151.9b34.9x50.6x12.4x
Thu, 14 Aug 2025US$7.6tUS$614.1bUS$153.0b36.5x49.9x12.4x
Sat, 12 Jul 2025US$7.5tUS$598.9bUS$131.3b40.8x56.8x12.4x
Mon, 09 Jun 2025US$6.9tUS$595.8bUS$131.6b40.1x52.8x11.7x
Wed, 07 May 2025US$6.4tUS$589.4bUS$131.0b33.3x48.8x10.9x
Fri, 04 Apr 2025US$5.8tUS$581.4bUS$131.8b29x43.8x9.9x
Sun, 02 Mar 2025US$6.1tUS$580.6bUS$129.1b34.5x47.6x10.6x
Tue, 28 Jan 2025US$6.6tUS$568.2bUS$129.2b43x51.2x11.6x
Thu, 26 Dec 2024US$6.6tUS$569.1bUS$128.8b41.2x51.5x11.6x
Sat, 23 Nov 2024US$6.5tUS$567.3bUS$127.2b42.4x50.7x11.4x
Mon, 21 Oct 2024US$6.1tUS$551.7bUS$124.1b37.6x48.9x11x
Wed, 18 Sep 2024US$6.0tUS$552.4bUS$124.0b38.9x48.5x10.9x
Fri, 16 Aug 2024US$5.7tUS$548.8bUS$121.5b35.8x47.1x10.4x
Sun, 14 Jul 2024US$6.0tUS$530.6bUS$118.4b40.7x50.9x11.4x
Tue, 11 Jun 2024US$5.3tUS$477.7bUS$107.2b40.1x49.2x11x
Thu, 09 May 2024US$5.2tUS$477.4bUS$103.8b43.8x50.1x10.9x
Sat, 06 Apr 2024US$5.3tUS$466.0bUS$98.3b43.2x54x11.4x
Mon, 04 Mar 2024US$5.5tUS$468.6bUS$98.1b42.9x55.6x11.6x
Wed, 31 Jan 2024US$5.5tUS$486.8bUS$82.4b48x67.3x11.4x
Fri, 29 Dec 2023US$5.2tUS$486.1bUS$82.9b46.8x62.4x10.6x
Sun, 26 Nov 2023US$5.0tUS$482.6bUS$79.9b46.4x62.4x10.3x
Tue, 24 Oct 2023US$4.5tUS$477.3bUS$73.7b41.9x60.5x9.3x
Thu, 21 Sep 2023US$4.5tUS$480.7bUS$73.0b45.7x61.3x9.3x
Sat, 19 Aug 2023US$4.3tUS$473.5bUS$70.4b42.8x61.6x9.2x
Price to Earnings Ratio

61.6x


Total Market Cap: US$4.3tTotal Earnings: US$70.4bTotal Revenue: US$473.5bTotal 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 26% 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 Market0.091%
Tech0.25%
Software2.41%
Application Software3.19%
Systems Software2.14%
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 17.7%, 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$503.812.2%
+US$81.7b		-4.8%PE28x
PLTR Palantir TechnologiesUS$174.947.5%
+US$29.5b		-6.4%PE139.4x
PANW Palo Alto NetworksUS$383.804.8%
+US$14.2b		118.8%PE371.1x
TEAM AtlassianUS$154.0839.7%
+US$11.1b		-2.5%PS5.9x
CRWD CrowdStrike HoldingsUS$221.905.1%
+US$10.9b		103.7%PS44.4x

Latest News

NBIS
US$193.23
Nebius Group
7D
-14.4%
1Y
156.5%
HUBS
US$220.51
HubSpot
7D
-11.4%
1Y
-48.0%
CRM
US$197.47
Salesforce
7D
3.4%
1Y
-14.8%
PLTR
US$174.94
Palantir Technologies
7D
7.5%
1Y
-6.4%
Analysis Article • Aug 11

Palantir Technologies' (NASDAQ:PLTR) Solid Earnings Are Supported By Other Strong Factors

Palantir Technologies Inc. ( NASDAQ:PLTR ) recently posted some strong earnings, and the market responded positively...
HUT
US$88.78
Hut 8
7D
-12.2%
1Y
311.4%
CIFR
US$17.21
Cipher Digital
7D
-15.6%
1Y
264.6%
MSFT
US$503.81
Microsoft
7D
2.2%
1Y
-4.8%
DDOG
US$246.78
Datadog
7D
-14.4%
1Y
91.4%
Seeking Alpha • Aug 09

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$383.80
Palo Alto Networks
7D
4.8%
1Y
118.8%
NOW
US$127.54
ServiceNow
7D
8.0%
1Y
-25.3%
BSP
US$53.44
Bending Spoons
7D
42.7%
1Y
n/a
TEAM
US$154.08
Atlassian
7D
39.7%
1Y
-2.5%
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.
FIG
US$24.87
Figma
7D
-8.3%
1Y
-71.5%
Narrative Update • Aug 07

FIG: AI Investments And Margin Pressure Will Set Up Future Upside Potential

Analysts have reset their price target for Figma to $37.00 from about $92.12, citing updated assumptions around higher revenue growth, a slightly higher discount rate, a modestly lower profit margin outlook, and a lower future P/E multiple. What’s in the News for Figma Figma reported second quarter 2026 results that were ahead of revenue and profit estimates, with revenue up 48% helped by the first full quarter of monetizing AI credits.
FTNT
US$161.89
Fortinet
7D
-3.8%
1Y
106.3%
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$221.90
CrowdStrike Holdings
7D
5.1%
1Y
103.7%
CDNS
US$327.53
Cadence Design Systems
7D
-3.8%
1Y
-7.4%
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.