Global Software Sector Update–Spring 2026

The global software sector entered 2026 with strong deal momentum but a shifting valuation landscape. M&A activity remains robust, with Q1 tracking toward the second-highest annual deal volume on record at an annualized 2,644 transactions. However, total deal value has softened, reaching an annualized $92.6 billion, as fewer mega-deals and ongoing macroeconomic uncertainty weigh on overall investment levels.

Strategic acquirers continue to dominate, accounting for 76% of all transactions, up from 71% in 2025. This trend underscores a growing emphasis on acquiring capabilities in artificial intelligence (AI), data infrastructure, and workflow automation. Meanwhile, private equity investors remain selective, focusing on profitable, high-quality assets with clear growth visibility.

Deal activity continues to concentrate in high-priority subsectors such as cybersecurity, enterprise resource planning, infrastructure, and vertical software. Notable transactions—including OneStream, Brex, and Reltio—highlight strong demand for platforms that enable AI adoption and drive mission-critical operations.

Looking ahead, AI remains the defining theme shaping software investment. Buyers are prioritizing differentiated platforms with scalable growth, strong margins, and credible AI strategies, while public market volatility and uncertainty around AI monetization continue to influence sentiment.