Machine learning has become a powerful tool for solving problems in various engineering and science areas, including the area of communication systems. This paper presents the use of capsule networks for classification of digitally modulated signals using the I/Q signal components. The generalization ability of a trained capsule network to correctly classify the classes of digitally modulated signals that it has been trained to recognize is also studied by using two different datasets that contain similar classes of digitally modulated signals but that have been generated independently. Results indicate that the capsule networks are able to achieve high classification accuracy. However, these networks are susceptible to the datashift problem which will be discussed in this paper.