The Technology Services industry is projected to recover to pre-pandemic revenue levels, driven by factors such as increased remote work, rapid digital transformation, and advancements in technologies like 5G and AI. In 2025, GDP growth in the U.S. was reported at 0.5%, a decrease from 4.4% in the previous quarter, yet non-manufacturing activities remain strong, as indicated by the Services PMI staying above 50% for 21 consecutive months. The increasing demand for data security will further stimulate industry growth.
In 2025, Dave Inc. (DAVE) reported a 50% revenue increase to $554 million, with adjusted EBITDA margins of 41% and a notable 213.4% rise in share price over the year. GDS Holdings (GDS) achieved an 11% revenue growth, resulting in a positive free cash flow and promising new bookings projections for 2026 amid robust AI expansion in China. GigaCloud Technology Inc. (GCT) also experienced substantial growth, with a 40% revenue increase during the fourth quarter of 2025 and expanded infrastructure in Europe.
As of now, the Zacks Technology Services industry holds a Zacks Industry Rank of #172, placing it in the bottom 30% of 244 Zacks industries, although it has outperformed the broader Business Services sector, returning 39% over the past year compared to the sector’s 13.2% decline. The industry currently trades at an EV-to-EBITDA multiple of 17.32X, below the S&P 500’s 18.45X.
