Software M&A Report:
IT Infrastructure: The AI-era backbone commands a premium

Q2 2026 – M&A trends, valuation multiples and transactions in the Software sector

Personal Note: Resilience, re-rating and rising M&A momentum: IT Infrastructure Software emerges as the AI-era backbone

Against a backdrop of broad software multiple compression and ongoing AI-driven dispersion, IT Infrastructure Software has decoupled from the wider sector and re-emerged as a resilient growth segment. While the ARTHOS Software Index corrected sharply in early 2026 on concerns over AI displacement of installed bases, the ARTHOS IT Infrastructure Index advanced 19% in H1 2026, with Arista Networks (+300%) and IBM (+145%) leading a structural repricing of the layers that actually run enterprise AI workloads.

Macro conditions reinforce this rotation. Even as CIOs tighten discretionary SaaS spend, infrastructure budgets are being ring-fenced: global IT infrastructure software spending is projected to grow from ~$441bn in 2026 to $615bn by 2029 (12% CAGR), with AI-relevant sub-segments compounding at 15%. In Europe, the Digital Decade target of 75% enterprise cloud adoption by 2030 and a cloud infrastructure services market scaling from $40bn to $43.5bn underscore the durability of demand, with PaaS the fastest-growing layer.

Arne Tödt

Managing Partner ARTHOS
Expert in Digital Services & Software

arne.toedt@arthos.de

Grafik zur Aktienkursentwicklung im Bereich Software — Source: Capital IQ (as of June 15, 2026). Note: In the ARTHOS IT Infrastructure Index, the weight of each company’s stock was capped at 15% as of the start date.

The investment thesis is anchored in four converging trends visible across our coverage: cloud-native and Kubernetes-based workload orchestration, deeper security integration into the infrastructure stack, automation of hybrid-cloud management, and consolidation of fragmented data platforms into AI-ready unified data architectures. Recent transactions evidence the shift, including IBM/Confluent ($11bn), ServiceNow/Armis ($7.75bn), Palo Alto/CyberArk ($25bn), IREN/Mirantis ($625m) and SAP’s tuck-ins of Reltio and Dremio. Strategics are clearly going on offense to own the AI-enabling layers, while financial sponsors continue to drive platform consolidation.

M&A deal value record in Q1 2026 was dominated by SpaceX’s landmark acquisition of x.AI

M&A momentum supports this view, with 80 deals in Q1 2026* following a record 109 in Q4 2025. Valuations reflect the premium: IT Infrastructure trades at ~4.2x NTM EV/Sales versus ~3x for the broader market, with leading platforms commanding meaningful scarcity premia.

For owners of IT infrastructure software assets, the current environment presents an attractive window: well-prepared processes that evidence AI enablement, recurring revenue quality and platform fit should achieve premium outcomes.

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