Our May 2026 Market Update captures a market beginning to stabilise after months of compression: April marked the first month of broad multiple recovery, with AI capital continuing to concentrate at record pace while a structural divide widens between companies with proprietary data assets and those without.

• The recovery is real but partial: the B2B Software Universe rebounded 5% in April, though it remains down nearly 19% year-to-date. EV/Sales multiples edged back up to 4.2x from 4.0x in March, still well below the long-term average of 6.6x and at levels last seen in Q1 2017. Notably, the largest-cap companies drove the rebound, up 18% on average, while smaller-cap software continued to lag.
• On the AI investment front, 2026 has already surpassed the full-year 2025 total with $233 billion invested across just four months, driven by landmark financings including a $15 billion raise by Anthropic. Deal momentum shows no sign of slowing at the top end of the market.
• Earnings pointed to a two-speed market: hyperscalers posted record AI-driven cloud growth, Microsoft surpassing $37 billion in AI ARR, AWS hitting a $150 billion annualised run rate, while mid-market players faced diverging fortunes shaped by the Middle East conflict and platform architecture choices.

Download the full May 2026 Market Intelligence briefing to access the complete analysis and data behind this month's insights.

What we analyze in this month's report

Valuation stabilisation: the first signs of a floor

After four months of sharp contraction, April marked a tentative inflection point. EV/Sales multiples recovered modestly to 4.2x, and EV/EBITDA moved from 14.1x to 14.9x. We examine what is driving this stabilisation, why the recovery remains concentrated in large-cap names, and what the narrowing North America–Europe valuation gap signals for cross-border deal activity.

Data & Intelligence: this month's deep dive

Our segment spotlight focuses on the data and intelligence vertical, one of the most structurally compelling areas in B2B tech. Drawing on a proprietary survey of over 100 financial institutions, we explore how data stack consolidation is reshaping vendor positioning, why proprietary data ownership commands premium valuations (10x+ revenue for assets like Visible Alpha and FlightRadar), and how the largest integrated platforms are pulling away from niche providers.

A deal environment defined by strategic data moats

Corporate M&A was active in Q2 with notable transactions including Capital One's acquisition of Brex and Viatris Group's $2 billion deal for HCSS. On the data side, strategic acquisitions dominated, S&P acquiring Visible Alpha, MSCI acquiring PM Insights, as incumbents move aggressively to defend and expand proprietary data capabilities ahead of an AI-first competitive landscape.

AI investment at record pace and increasingly concentrated

With $233 billion deployed year-to-date across 2026, AI investment has already surpassed 2025's full-year record. April's $23.5 billion was largely shaped by three mega-deals representing 71% of monthly volume. We look beyond the headlines at the segments gaining traction, hardware, MarTech, Office of the CIO, and healthcare AI, and highlight emerging use cases worth tracking.

Earnings: the AI CapEx boom, a regional conflict, and a supply chain divide

Q1 2026 earnings revealed three defining themes: hyperscalers scaling CapEx aggressively (Microsoft and Alphabet both guiding to $180–190 billion for calendar 2026) while reducing headcount; the Middle East conflict creating asymmetric impacts across enterprise software; and a widening gap in supply chain tech between legacy marketplace-dependent models and unified cloud-native platforms.

Why this matters

The April rebound offers some relief, but the B2B software market remains in a prolonged reset. The most important dynamic to watch is not the macro recovery, it is the structural divide opening between vendors with defensible, proprietary data assets and those exposed to AI disruption without a clear moat. As hyperscalers accelerate their infrastructure buildout and strategic acquirers target data capabilities, understanding which software categories are positioned to capture AI tailwinds, and which face displacement, is becoming the central question for investors and corporate strategists alike.

Download the full May 2026 Market Intelligence briefing to access our latest data, analysis and sector insights, or contact our team to discuss the findings in more detail.