Resource | Baker Tilly Capital Insider
Software and technology M&A update: H2 2025
March 2, 2026
Decoding the trends of software and technology
The software and technology (S&T) landscape continued to evolve rapidly in the second half of 2025, shaped by shifting economic conditions, accelerating innovation and persistent global uncertainty. As organizations doubled down on digital transformation and AI adoption, investor interest remained strong.
The following report developed by Baker Tilly Capital, LLC provides an update on the S&T mergers and acquisitions (M&A) market in the second half of 2025. The report includes an overview of the market performance, M&A activity, transactions by segment and buyer and U.S. M&A activity.
Here are some key takeaways from the report:
- The global software and technology (S&T) sector delivered modest gains in the second half of 2025 amid persistent macroeconomic uncertainty, tariff pressures and geopolitical volatility.
- The BT Capital software-as-a-service (SaaS) Index underperformed benchmark indices such as the S&P 500 and IGV, though a handful of categories, including business and analytics and development and operations (DevOps), posted notable gains. Palantir Technologies Inc. and Snowflake Inc. were standout performers, driven by accelerating AI demand.
- SaaS merger and acquisition (M&A) activity remained robust, reaching a new high in deal volume and sustaining elevated valuations for a second consecutive year. SaaS accounted for roughly 58% of total software M&A, consistent with historical trends but boosted by broad-based growth in AI-driven transactions.
- “A” assets, especially those enabling mission-critical workflows, AI infrastructure, cybersecurity and data platforms, saw intensifying competition from both strategic buyers and financial buyers, with take-private transactions continuing to surge.
