Software Valuations Update – Q3 2026

Software valuations have experienced significant volatility in 2026, driven by concerns around AI disruption, business-model durability, and long-term growth prospects. While public software stocks have broadly recovered from their early-year lows, performance has varied significantly by subsector. Security and DevOps have outperformed, reflecting AI as a tailwind, while horizontal and vertical applications remain below pre-2026 levels.

Despite these shifts, growth remains the strongest driver of software valuations, with faster growing companies commanding significant revenue multiple premiums. Profitability remains relevant but has demonstrated a weaker relationship with valuation.

Overall, these trends point to an increasingly selective valuation environment, where financial performance, business-model durability, and AI positioning collectively shape investor appetite.

Our full report is viewable here: Software Valuations Update (Q3 2026)