Software Sector Valuations Reset to 6x–8x Forward Revenue — 'New Normal' After SaaSpocalypse, Down from 20x in 2021

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Following the April rally, software sector valuations have stabilized at 6x to 8x forward revenue, down from the 20x peak in 2021. SaaStr previously reported that software stocks now trade at a discount to the S&P 500 for the first time ever. The new valuation floor reflects a permanent repricing: AI makes software cheaper to build, which compresses margins and multiples, but the companies that successfully monetize AI agents are being rewarded. For builders evaluating exit multiples or fundraising: 6-8x forward revenue is the baseline, with AI-powered revenue growth the only lever for premium multiples.