Track market-moving stories before they get noisy

For Immediate ReleaseChicago, IL – August 27, 2026 – Today, Zacks Equity Oracle Corp. (ORCL - Free Report) , ACI Worldwide (ACIW - Free Report) and Progress Software Corp. (PRGS - Free Report) . 

Industry: Software

Link: https://www.zacks.com/commentary/2980181/3-software-stocks-to-keep-an-eye-on-amid-industry-weakness

ncertainty prevailing over global macroeconomic conditions continues to be concerning for the Zacks Computer Software industry participants, as this might upend IT budgets. The software industry remains highly competitive, particularly in artificial intelligence (AI) area, which can lead to pricing pressure that could impact margins.

However, the industry's evolving trends point to momentum ahead. The industry participants are positioned for long-term growth as businesses around the globe accelerate their digital transformation initiatives. The ongoing migration to cloud and the widespread adoption of Software-as-a-Service (SaaS) models continue to provide recurring revenue visibility for vendors while giving customers the scalability, flexibility and cost efficiency they increasingly demand.

At the same time, rapid advances in AI and machine learning (“ML”) are reshaping the industry. The cutting-edge technologies are being swiftly integrated into enterprise and consumer applications. Software vendors are increasingly embedding generative AI into productivity tools, customer service platforms and enterprise resource planning systems. 

Per a Precedence Research report, the global software market is expected to witness a CAGR of 11.6% from 2026 to 2035 to reach 2,468.93 billion. These trends augur well for industry participants, such as Oracle Corp., ACI Worldwide and Progress Software Corp.

Industry DescriptionThe Zacks Computer Software industry includes companies that provide software applications related to AI, cloud computing, electronic design automation (primarily for semiconductor and electronics industries), digital media and marketing, customer relationship management, on-premises and cloud-based database management, accounting and tax purposes, human capital management, cybersecurity and application performance monitoring and a cloud-based enterprise communications platform. 

Some companies develop and market simulation software (like computer-aided design or CAD, 3D modeling, product lifecycle management or PLM, data orchestration and experience creation), which engineers, designers and researchers use across various industries like architecture, engineering and construction, product design, manufacturing and digital media.

3 Trends Shaping the Future of the Software IndustryHigher Spending on AI and Cloud: Cloud computing will continue to be a dominant force in the software industry, with businesses adopting hybrid and multi-cloud environments to meet their growing needs for flexibility and scalability. Cloud offers a flexible and cost-effective platform for developing and testing applications. The deployment time is also shorter compared with legacy systems. SaaS companies are expected to register strong top-line growth on a higher percentage of recurring revenues, subscription gross margin and a lower churn rate. 

However, AI, Generative AI, in particular, is now becoming the defining force behind the next chapter of software evolution. The continued investment in AI, big data and analytics, and the ongoing adoption of SaaS open up opportunities for these players. Going forward, AI and ML tech are expected to be widely integrated into software tools. This increasing demand for AI-powered software tools for automation, personalization, predictive analytics and decision-making augurs well. 

According to a report from Gartner, worldwide AI spending is projected to reach $2.59 trillion in 2026, calling for an increase of 47% from 2025 levels. Spending on AI-related software continues to rise, according to Gartner, with the estimated spend at $453.2 billion, up from $282.9 billion in 2025. 

Increased Cybersecurity Focus:The increasing need to secure cloud platforms amid growing cyberattacks and hacking incidents drives demand for cybersecurity software. As software becomes more interconnected, cloud-native and AI-powered, it is driving the demand for performance management monitoring tools that are scalable and suitable for cloud-based environments. Zero-trust architectures, identity and access management and real-time threat detection powered by AI are becoming essential features of modern software platforms. 

Macroeconomic Headwinds a Concern: Global macroeconomic weakness and volatile supply-chain dynamics are persistent concerns. Though tariff troubles are unlikely to affect the software industry directly, higher tariffs on hardware would lead to higher costs. This would affect software pricing as well. Inflation could affect spending across small and medium-sized businesses globally. The uncertainty in business visibility could dent the industry’s performance in the near term. 

Zacks Industry Rank Indicates Bleak ProspectsThe Zacks Computer Software industry is housed within the broader Zacks Computer and Technology sector. This carries a Zacks Industry Rank #165, which places it in the bottom 33% of more than 247 Zacks industries.

The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates bleak near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.

Before we present a few stocks you may want to consider for your portfolio, given their bright prospects, let us look at the industry’s recent stock-market performance and valuation picture.

Industry Underperforms the Sector and the S&P 500The Zacks Computer Software industry has underperformed the broader Zacks Computer and Technology sector and the S&P 500 Index in the past year.

The industry has lost 12.1% over this period against the S&P 500 and the broader sector’s increases of 20.3% and 26.7%, respectively.

Industry's Current ValuationBased on the forward 12-month P/E, a commonly used multiple for valuing software companies, we see that the industry is currently trading at 22.95X compared with the S&P 500’s 20.32X. It is also up from the sector’s forward-12-month P/E of 20.66X.

In the past five years, the industry has traded as high as 35.33X and as low as 18.97X, with the median being 30.13X.

3 Software Stocks to Add to WatchlistACI Worldwide develops software solutions that enable intelligent payments orchestration for banks, merchants and billers. 

On the second-quarter 2026 earnings call, management noted a significant opportunity as financial institutions deal with complex payment environments, including more payment types and rails, greater real-time payment adoption, increasing fraud threats and dynamic regulations. This is pushing customers to transform legacy infrastructure.

ACI Worldwide delivered second-quarter revenues of $430 million, up 7% year over year, while adjusted EBITDA increased 12% to $91 million. The Payment Software segment was a key contributor, with revenues up 9% to $196 million. Issuing and acquiring grew 33% in constant currency, supported by large expansions with renewing customers.

AI is becoming another differentiator across ACI's portfolio. The company has embedded context-dependent intelligent routing and scoring capability within Connetic and has added tools that accelerate standard API deployment and customer implementation within its Speedpay One solution.

ACI raised its 2026 guidance following the strong first-half performance. Revenues are now expected at $1.895-$1.925 billion, up from the prior $1.89-$1.92 billion range, while adjusted EBITDA guidance increased to $545-$560 million from $540-$555 million.

ACIW currently sports a Zacks Rank #1 (Strong Buy). You can seethe complete list of today’s Zacks #1 Rank stocks here.  

The Zacks Consensus Estimate for the company’s 2026 earnings is pegged at $3.50 per share, indicating year-over-year growth of 23.7%. The stock has declined 8.1% in the past year.

Oracle is one of the well-known names in the tech space. The company’s operations span from enterprise software to cloud services and database management systems. 

Oracle’s database and cloud infrastructure businesses are fast gaining momentum. On the last earnings call, the company highlighted that the multicloud database opportunity was in the early stages. Continued expansion into new regions and partnerships with other cloud providers should support growth. 

Oracle delivered fourth-quarter revenues of $19.2 billion, rising 21% year over year. Cloud infrastructure revenues surged 93% year over year, driven by demand for AI workloads and database services. Cloud applications revenues increased 10% to $4.1 billion, while SaaS deferred revenues grew 16%. Oracle’s cloud database business grew 29%, with multicloud revenues up 404%, while bookings jumped 325% year over year. 

Oracle’s remaining performance obligations (“RPO”) stood at an impressive $638 billion, underscoring strong forward visibility. The massive RPO backlog, coupled with demand across AI infrastructure and cloud services, provides a clear runway for sustained growth.

For fiscal 2027, management reiterated its revenue target of $90 billion and raised non-GAAP earnings per share guidance to $8.05, representing 18% constant-currency growth. 

ORCL currently holds a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for the company’s fiscal 2027 earnings is pegged at $8.03 per share, indicating year-over-year growth of 5.2%. The stock has declined 38.6% in the past year.

Progress Software is benefiting from strength in its product portfolio, comprising offerings such as OpenEdge, WhatsUp Gold, ShareFile, Loadmaster, MOVEit and DevTools. The company’s platform aids in developing and deploying mission-critical business applications. 

Strength in data platform products as clients increasingly use enterprise data to provide context for AI applications bodes well. Progress' data and content business represents more than two-thirds of the total business, making this an increasingly important source of potential long-term growth. Progress is also benefiting from increasing demand for infrastructure management and content-driven workflow automation solutions.

Progress is embedding AI capabilities across its products, enabling customers to improve business outcomes. It recently unveiled Chef Enterprise Management for NVIDIA DGX Spark, expanding Chef's infrastructure-management capabilities into AI computing environments.  

Fiscal second-quarter revenues increased 7% year over year to approximately $253 million. ARR reached $868 million, representing 2% year-over-year growth in constant currency, while net retention stood at 100%.

For fiscal 2026, Progress raised its revenue forecast to $990 million to slightly more than $1 billion, implying growth of approximately 1-2.5% over fiscal 2025.

PRGS currently carries a Zacks Rank #3 (Hold). The Zacks Consensus Estimate for the company’s fiscal 2026 earnings is pegged at $6.16 per share, indicating year-over-year growth of 7.7%. The stock has declined 7.6% in the past year.

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ACI Worldwide (ACIW - Free Report) came out with quarterly earnings of $0.54 per share, beating the Zacks Consensus Estimate of $0.51 per share. This compares to earnings of $0.35 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of +5.88%. A quarter ago, it was expected that this maker of software for electronic payments would post earnings of $0.45 per share when it actually produced earnings of $0.61, delivering a surprise of +35.56%.

Over the last four quarters, the company has surpassed consensus EPS estimates three times.

ACI Worldwide, which belongs to the Zacks Computer - Software industry, posted revenues of $430.42 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 0.17%. This compares to year-ago revenues of $401.26 million. The company has topped consensus revenue estimates four times over the last four quarters.

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.

ACI Worldwide shares have added about 20.9% since the beginning of the year versus the S&P 500's gain of 12.8%.

What's Next for ACI Worldwide?While ACI Worldwide has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the estimate revisions trend for ACI Worldwide was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.92 on $417.9 million in revenues for the coming quarter and $3.46 on $1.9 billion in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Computer - Software is currently in the top 35% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

Another stock from the same industry, Intuit (INTU - Free Report) , has yet to report results for the quarter ended July 2026. The results are expected to be released on August 25.

This maker of TurboTax, QuickBooks and other accounting software is expected to post quarterly earnings of $3.59 per share in its upcoming report, which represents a year-over-year change of +30.6%. The consensus EPS estimate for the quarter has been revised 0.2% higher over the last 30 days to the current level.

Intuit's revenues are expected to be $4.27 billion, up 11.5% from the year-ago quarter.