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

U.S. Software Industry Analysis

UpdatedAug 30, 2026
DataAggregated Company Financials
Companies429
  • 7D5.8%
  • 3M5.8%
  • 1Y-1.1%
  • YTD7.6%

The Software industry is up 5.8% in the last week, with Microsoft up 6.3%. In the same time, Zoom Communications was down 8.4%. Despite this gain, the industry's performance has been flat over the past 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
Sun, 30 Aug 2026US$7.2tUS$719.2bUS$141.8b31.8x50.8x10x
Tue, 28 Jul 2026US$5.6tUS$700.4bUS$157.0b28.6x35.7x8x
Thu, 25 Jun 2026US$5.6tUS$698.4bUS$156.5b26.1x35.6x8x
Sat, 23 May 2026US$6.2tUS$687.1bUS$155.3b28.4x39.7x9x
Mon, 20 Apr 2026US$5.9tUS$668.1bUS$157.3b29.7x37.7x8.9x
Wed, 18 Mar 2026US$5.8tUS$669.4bUS$161.5b29.4x35.8x8.6x
Fri, 13 Feb 2026US$5.7tUS$660.0bUS$163.5b26.7x34.7x8.6x
Sun, 11 Jan 2026US$7.1tUS$648.9bUS$165.0b32.7x42.8x10.9x
Tue, 09 Dec 2025US$7.3tUS$641.9bUS$162.0b32x45.1x11.4x
Thu, 06 Nov 2025US$7.6tUS$637.6bUS$159.0b35.2x48x12x
Sat, 04 Oct 2025US$7.8tUS$621.4bUS$151.8b35.7x51.6x12.6x
Mon, 01 Sep 2025US$7.4tUS$616.6bUS$150.8b35.9x49x12x
Wed, 30 Jul 2025US$7.6tUS$597.5bUS$130.9b46.9x57.8x12.7x
Fri, 27 Jun 2025US$7.2tUS$599.0bUS$131.1b42x55x12x
Sun, 25 May 2025US$6.6tUS$593.0bUS$131.7b35.3x50.3x11.2x
Tue, 22 Apr 2025US$5.5tUS$580.5bUS$131.7b29.7x41.7x9.4x
Thu, 20 Mar 2025US$5.9tUS$582.8bUS$131.2b29x44.6x10x
Sat, 15 Feb 2025US$6.6tUS$588.2bUS$130.3b42.1x50.6x11.2x
Mon, 13 Jan 2025US$6.3tUS$569.1bUS$129.3b38.8x48.3x11x
Wed, 11 Dec 2024US$6.8tUS$567.9bUS$128.8b43.1x52.8x12x
Fri, 08 Nov 2024US$6.3tUS$563.0bUS$127.1b40.6x49.2x11.1x
Sun, 06 Oct 2024US$6.0tUS$551.7bUS$124.1b38.8x48.1x10.8x
Tue, 03 Sep 2024US$5.8tUS$550.8bUS$122.1b38.9x47.8x10.6x
Thu, 01 Aug 2024US$5.7tUS$540.7bUS$120.1b40.4x47.6x10.6x
Sat, 29 Jun 2024US$6.0tUS$531.0bUS$118.1b40.5x50.7x11.3x
Mon, 27 May 2024US$5.4tUS$475.8bUS$105.8b42.2x50.8x11.3x
Wed, 24 Apr 2024US$5.2tUS$466.5bUS$98.4b42.4x52.6x11.1x
Fri, 22 Mar 2024US$5.4tUS$465.8bUS$98.0b45.4x55.6x11.7x
Sun, 18 Feb 2024US$5.3tUS$465.3bUS$90.9b42.7x58.3x11.4x
Tue, 16 Jan 2024US$5.3tUS$486.2bUS$82.2b46.2x64.1x10.8x
Thu, 14 Dec 2023US$5.1tUS$485.6bUS$82.5b49.3x61.9x10.5x
Sat, 11 Nov 2023US$4.7tUS$482.1bUS$79.1b44.3x59.8x9.8x
Mon, 09 Oct 2023US$4.5tUS$477.3bUS$73.4b45.1x61.5x9.5x
Wed, 06 Sep 2023US$4.6tUS$475.8bUS$72.6b44.8x63.9x9.8x
Price to Earnings Ratio

63.9x


Total Market Cap: US$4.6tTotal Earnings: US$72.6bTotal Revenue: US$475.8bTotal Market Cap vs Earnings and Revenue0%0%0%
U.S. Software Industry Price to Earnings3Y Average 49.2x202420252026
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 49.2x.
  • 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 25% 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 Market0.28%
Tech1.57%
Software5.83%
Systems Software6.17%
Application Software4.93%
Industry PE
  • Investors are most optimistic about the Systems Software industry even though it's trading below its 3-year average PE ratio of 38.2x.
    • Analysts are expecting annual earnings growth of 18.1%, which is lower than the prior year's growth of 20.4% per year.
Forecasted Growth
  • Analysts are most optimistic on the Application Software industry, expecting annual earnings growth of 26% over the next 5 years.
  • However this is lower than its past earnings growth rate of 43% 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$513.536.3%
+US$224.9b		1.3%PE28.5x
CRM SalesforceUS$256.0022.4%
+US$39.4b		-0.1%PE21.8x
CRWD CrowdStrike HoldingsUS$218.4013.8%
+US$28.2b		106.2%PE4970x
NOW ServiceNowUS$144.7112.6%
+US$16.8b		-21.1%PE89.6x
PLTR Palantir TechnologiesUS$186.293.5%
+US$15.3b		18.9%PE148.4x

Latest News

RBRK
US$93.05
Rubrik
7D
-7.0%
1Y
4.1%
U
US$43.31
Unity Software
7D
-7.7%
1Y
9.9%
NOW
US$144.71
ServiceNow
7D
12.6%
1Y
-21.1%
Seeking Alpha • Aug 29

ServiceNow Has Quietly Shaken Off The AI Apocalyptic Fears

Summary ServiceNow business and stock are finally regaining momentum, with shares almost recovering 2026 losses and breaking above key support, validating its AI go to market strategy. NOW's land-and-expand strategy, model-agnostic AI integration, and enhanced cybersecurity partnerships are driving AI monetization and workflows expansion. AI bundle pricing has seen a 30% uplift, and management expects ACV to exceed $1.5 billion, supporting faster AI-native SKU growth from 2027. ServiceNow is seeing its valuation multiple improving further although it remains well below its five-year average. With the stock now getting ready to resume its long-term uptrend, this is the time to lean in and add exposure if you have not done so earlier on. Read the full article on Seeking Alpha
PANW
US$371.59
Palo Alto Networks
7D
3.8%
1Y
95.0%
Seeking Alpha • Aug 29

Palo Alto Networks: Priced For A Future It Hasn't Earned Yet (Rating Downgrade)

Summary Palo Alto Networks has surged 44% since my last update, outperforming the benchmark and demonstrating robust business fundamentals. Despite stellar earnings and consistent double-beats, PANW now trades at a 90x forward P/E—almost 4x the sector median—making further multiple expansion unlikely. The cybersecurity market's projected 14% CAGR remains a tailwind, but current valuations likely already price in much of this growth. I am downgrading PANW from Strong Buy to Hold due to its premium valuation and limited room for error, despite its market leadership. Read the full article on Seeking Alpha
INTU
US$358.06
Intuit
7D
-2.4%
1Y
-46.3%
MSFT
US$513.53
Microsoft
7D
6.3%
1Y
1.3%
Seeking Alpha • Aug 28

Microsoft: The Rerating Is Probably Over For Now (Rating Downgrade)

Summary Microsoft rallied after Q4 results, reversing prior negative sentiment tied to AI CapEx and Azure growth deceleration. MSFT’s CapEx guidance for 2026 stabilized, Copilot adoption accelerated, and Azure growth re-accelerated to 43%, easing concerns about margin compression and competitive moats. Despite the rally, MSFT trades at a premium to other hyperscalers, requiring conviction in sustainable margin drivers. Structural margin pressure persists due to a sales mix shift to lower-margin Azure and heavy AI infrastructure investment, challenging the case for a continuation in the rerating. Read the full article on Seeking Alpha
IREN
US$35.45
IREN
7D
-15.4%
1Y
33.9%
Narrative Update • Aug 28

Retail Frustration is High, But Will Patience Pay Off?

IREN’s FY26 annual earnings report (for the Australian financial year ended June 30, 2026) triggered an immediate 8%+ post-market drop. Algorithms panicked over a $684M Q4 GAAP net loss driven by $450.4M in nons-cash ASIC impairments, while Wall Street choked on a massive $25B to $30B FY27 CapEx forecast.
CRM
US$256.00
Salesforce
7D
22.4%
1Y
-0.1%
Narrative Update • Aug 28

Salesforce's latest earnings result and strategic acquisitions reaffirm thesis on AI pivot

As previously stated, the shift to an agentic platform has been the primary focus, which is now flowing through to strong earnings results (210% Agentforce revenue growth) Through recent acquisitions like Contentful and Fin, Salesforce is buying specialised capabilities that fill gaps around Agentforce — commerce, customer conversations, content, monetisation and customer service Salesforce increasingly wants users to operate Salesforce without actually opening Salesforce. Slackbot can update opportunities, research accounts, route cases, trigger workflows and invoke Agentforce agents conversationally.
CRWD
US$218.40
CrowdStrike Holdings
7D
13.8%
1Y
106.2%
FTNT
US$166.00
Fortinet
7D
8.1%
1Y
110.7%
QBTS
US$16.99
D-Wave Quantum
7D
-16.7%
1Y
8.8%
ZM
US$98.43
Zoom Communications
7D
-8.4%
1Y
20.9%
ORCL
US$150.85
Oracle
7D
3.0%
1Y
-33.3%
Seeking Alpha • Aug 26

Oracle: Why I Am Staying Strong After Q4 2026

Summary I reiterate a Strong Buy on Oracle Corporation with a $185 price target, driven by robust Q4 2026 results and accelerating AI infrastructure momentum. The $638 billion RPO looks more credible than it did eight months ago. The majority of incremental Q4 RPO also came through customer prepayments or bring-your-own-hardware structures. 2027 could mark a major growth inflection. Forward revenue growth of 31.54% is about 151% above the sector median, which tells me ORCL's growth profile is moving well beyond it. The valuation gives me room to stay aggressive. Using a 23x multiple on 2027 non-GAAP EPS guidance of $8.05 gives me a $185 price target. The AI infrastructure thesis is getting stronger. ORCL is adding close to another 1 GW of data center capacity in Q1 2027, which should support another step-up in OCI revenue. Read the full article on Seeking Alpha
NBIS
US$209.18
Nebius Group
7D
-4.5%
1Y
206.2%
Seeking Alpha • Aug 25

Nebius Is Building Faster Than The Market Realizes

Summary Nebius Group N.V. revenue surged 454%, while AI Cloud EBITDA margin reached 50% and ARR expanded to $3 billion. Short-term capacity commands $40 million to $50 million per megawatt, signaling substantial scarcity and improving pricing power. Nebius targets more than 1 gigawatt of 2027 deployment while customer prepayments should exceed $9 billion during 2026. A $14 billion 2027 revenue scenario at 11x sales supports approximately $500 per diluted NBIS share with successful execution. Read the full article on Seeking Alpha
PLTR
US$186.29
Palantir Technologies
7D
3.5%
1Y
18.9%
AUR
US$5.83
Aurora Innovation
7D
-6.6%
1Y
3.6%
Seeking Alpha • Aug 19

Aurora Innovation: Scaling Too Slow

Summary Aurora Innovation faces intensifying competition amid slow scaling, with only 200 autonomous trucks targeted by end-2026. AUR's transition from TaaS to DaaS will boost margins but reduce per-truck revenue in 2027. The $14B market cap appears stretched given projected revenue ramp, ongoing dilution, and high cash burn through at least 2028. I remain neutral, seeing the stock range-bound ($4–$8) due to premium valuation, execution risks, and lack of compelling upside catalysts. Read the full article on Seeking Alpha