U.S. Software Faces 2026 AI Inflection as H1 Fundamentals Improve After 2021 Reset
Updated
Updated · JP Morgan · Aug 20
U.S. Software Faces 2026 AI Inflection as H1 Fundamentals Improve After 2021 Reset
3 articles · Updated · JP Morgan · Aug 20
Summary
H1 2026 showed improving software-sector fundamentals, but investor confidence stayed restrained as markets reassessed which companies will benefit most from AI.
AI is shifting leadership toward cloud infrastructure, cybersecurity and data platforms, while widening the gap between AI-native vendors and traditional software companies.
Software monetization is also changing: seat-based SaaS pricing is giving way to usage- and outcome-based models as enterprises increasingly buy AI tools instead of building them internally.
J.P. Morgan said the reset that followed 2021 has left public markets rewarding profitable growth more selectively, while venture funding is bifurcating between AI-native and non-AI firms.