Strategic Intelligence: Application Software Sector Scorecard Q2 2025 Update

Vibe coding is an emerging trend where developers write software using natural language instructions. Gradually crossing the critical threshold of early adoption, it is becoming the default mode for prototyping and early-stage application development. This shift is driven by the convergence of three forces: maturing artificial intelligence (AI) assistants, rising demand for rapid iteration, and the democratization of software creation.

Key Highlights

• The latest US tariffs have created a volatile environment for application software companies, inflating hardware and infrastructure costs, straining global supply chains, and triggering economic uncertainty. US application software companies like Microsoft, Amazon, and Oracle face rising operational expenses and shrinking enterprise IT budgets, while price hikes threaten customer retention.
• Chinese software companies such as Huawei and iFlytek are hit even harder, as higher tariffs and restricted US access affect profitability and limit investment in research and development, hindering innovation and growth. In retaliation, China has begun implementing countermeasures such as fiscal stimulus packages, supply chain resilience frameworks, and enforced technology self-reliance to mitigate the impact of the US tariffs.

Scope

• This sector scorecard provides a top-down, comprehensive outlook for the key players in the application software sector over the next two years, based on the key themes set to transform their industry landscape.

Reasons to Buy

• Companies that invest in the right themes become success stories. Those that miss the important themes in their industry end up as failures.
• The analyst's thematic research ecosystem is a single, integrated global research platform that provides an easy-to-use framework for tracking all themes across all companies in all sectors. It has a proven track record of identifying the important themes early, enabling companies to make the right investments ahead of the competition and secure that all-important competitive advantage.
• The analyst has developed a unique thematic methodology for ranking all major companies in all major sectors based on their relative strength in the big themes that are impacting their industries.
• First, we identify the top 10 themes transforming a sector across four categories (tech, macro, industry, and ESG). We also rank themes in order of priority by examining activity levels across 200 million alternative data signals, including patents, jobs, deals, filings, social media, and news.
• Second, we research each theme in detail, examining the value chain, key players, and trends. Additionally, we examine the impact of each theme across the 20 industries we cover. Our 200 million signals help identify the leading adopters of a theme in each sector.
• Finally, using our sector scorecards, we rank the companies most likely to succeed in a sector over the next five years.