M&A Trends
In Q4 2025, technology M&A remained active, driven by AI, software, and digital infrastructure. Middle-market deal volume was steady, with buyers favoring disciplined valuations and vertical SaaS or AI-enabled platforms, while bulge-bracket transactions were fewer, larger, and more exposed to regulatory and execution risk.
Macro factors, including rate-cut expectations, regulatory uncertainty, and abundant dry powder provided support for dealmaking while reinforcing selectivity across both segments. This environment made Q4 a seller’s market in many niches while keeping overall tech M&A momentum healthy into year-end.
Market Dynamics
- Sales & Marketing saw a strong year-end, bringing the sector back in line with Q1 highs and underscoring continued company demand for digital advertising platforms, customer data tools, and brand-building channels.
- Content & Storage Management continued to falter, declining more than 10 percent from the prior high reached earlier this year, reflecting weakening demand and slower client investment in specialized software.
- The U.S. government is a driving force behind the continued support of AI through the newly launched Genesis Mission, led by the Department of Energy. With the intention to integrate AI, supercomputing, and federal scientific data into a unified research platform, the initiative positions the federal government as a long-duration buyer of AI.1
- Strategic investment and partnership activity among large technology incumbents increasingly focused on securing AI infrastructure and compute capacity. OpenAI’s multi-year cloud and infrastructure commitments with Oracle, alongside expanded joint buildouts under the Stargate Initiative, reflect a shift toward ecosystem control and vertical integration rather than traditional financial M&A.2
Sources: Capital IQ as of 12/31/2025, The White House1, OpenAI2
Learn More
Reach out to Dinan Capital Advisors Managing Director Will Downing for more report insights.