Despite fears of recession that began this year, particularly driven by tariff announcements and disappointing economic reports, software stocks are being identified as a potential safe haven for investors. Earlier in March this year, Bank of America highlighted the historical resilience of the software sector during economic downturns and suggested that it could offer relief for anxious traders. According to Bank of America, infrastructure and back-office application platform vendors are particularly recommended in a recessionary environment due to their more resilient spending. Historically, it takes two to three quarters for a recession to impact software revenue or billings, as IT budgets adjust downwards over time.
Tariffs are expected to impact only a portion of the software industry, primarily e-commerce vendors. However, overall, Bank of America did not anticipate a recession and observed healthy signals within the software sector. The bank maintained its expectation of reasonable year-on-year revenue growth of 13.4% for both the first and second quarters of 2025. Goldman Sachs also pointed out that software is the only AI-exposed tech sector that has seen positive revisions to consensus sales estimates for 2026. Business Research Company reported that the infrastructure software market size is expected to grow from $209.55 billion in 2024 to $220.25 billion in 2025 at a CAGR of 5.1%.
That being said, we’re here with a list of the 11 best software infrastructure stocks to invest in.
An experienced software engineer working on a complex line of code in a programming suite.
Methodology
We first used the Finviz stock screener to compile a list of the top software infrastructure stocks. We then selected the 11 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q1 2025.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
11 Best Software Infrastructure Stocks To Invest In
11. Affirm Holdings Inc. (NASDAQ:AFRM)
Number of Hedge Fund Holders: 63
Affirm Holdings Inc. (NASDAQ:AFRM) is one of the best software infrastructure stocks to invest in. On June 25, Affirm Holdings announced a partnership with Shopmonkey that makes Affirm a default pay-over-time option for thousands of auto shops using Shopmonkey’s payment processing solution in both the US and Canada. This allows customers to split their auto repair bills into flexible biweekly or monthly payment plans, with interest rates as low as 0% APR, and notably, no late or hidden fees.
The initiative aims to empower small to medium-sized auto shops by providing their customers with more accessible payment options. Car owners in the US typically spend ~$800 annually on vehicle maintenance. Affirm’s share price has already seen a 40% increase over the past quarter, which shows strong investor confidence.
The sentiment is further fueled by Affirm’s return to profitability in its latest earnings report and its expanding partnerships with major companies like Costco and Williams-Sonoma in Canadian markets. Over the past 3 years, Affirm’s total shareholder return soared by 248.32%, outperforming the broader US Market and the Diversified Financial industry over the last year.
Affirm Holdings Inc. (NASDAQ:AFRM) operates a payment network in the US, Canada, and internationally. Shopmonkey is a cloud-based auto shop management platform.
10. CrowdStrike Holdings Inc. (NASDAQ:CRWD)
Number of Hedge Fund Holders: 64
CrowdStrike Holdings Inc. (NASDAQ:CRWD) is one of the best software infrastructure stocks to invest in. On June 25, CrowdStrike announced that it had been recognized as a Leader in the IDC MarketScape: Worldwide Cloud-Native Application Protection Platform/CNAPP 2025 Vendor Assessment. The recognition highlights CrowdStrike’s leadership in securing modern hybrid environments, particularly as the only CNAPP provider offering unified and real-time protection across cloud, identity, and endpoint.
The company’s flagship product, called CrowdStrike Falcon Cloud Security, is an integral part of the broader CrowdStrike Falcon platform. It unifies proactive security with cloud runtime protection, and provides end-to-end code-to-cloud visibility, AI-driven risk prioritization, and real-time detection and response capabilities to prevent breaches.
The IDC MarketScape specifically lauded Falcon for its proactive unified cloud security posture management/USPM that uses threat intelligence, end-to-end attack paths, and ExPRT.AI to reduce alert noise and attack surface. It also noted Falcon’s reactive security in the form of cloud workload protection/CWP and cloud detection and response.
CrowdStrike Holdings Inc. (NASDAQ:CRWD) provides cybersecurity solutions internationally.
9. CyberArk Software Ltd. (NASDAQ:CYBR)
Number of Hedge Fund Holders: 64
CyberArk Software Ltd. (NASDAQ:CYBR) is one of the best software infrastructure stocks to invest in. On June 24, CyberArk announced that Panasonic Information Systems Co. Ltd., which is the IT strategy arm of the Panasonic Group, has successfully implemented the CyberArk Identity Security Platform. The deployment is a part of Panasonic’s broader digital transition initiative, known as Panasonic Transformation/PX, which commenced earlier in May 2021.
The primary goal of this implementation is to secure privileged access to thousands of servers, which include both Windows and Linux, across the entire Panasonic Group. Before this, Panasonic Information Systems relied on a manual approach to privileged access management, which led to inefficiencies and limited visibility into access requests and approvals.
With the adoption of CyberArk Privileged Access Manager, a component of the CyberArk Identity Security Platform, Panasonic has now established a modern, automated, and centralized environment for managing privileged access. This system provides visibility into server access and details who accessed which server, when, and what actions were performed. Thereby creating an audit trail for improved post-incident investigations. Additionally, credentials and passwords are now automatically granted, hidden from users, and rotated within the CyberArk platform.
CyberArk Software Ltd. (NASDAQ:CYBR) develops, markets, and sells software-based identity security solutions and services internationally. Panasonic Holdings Corporation researches, develops, manufactures, sells, and services various electrical and electronic products worldwide.
8. Toast Inc. (NYSE:TOST)
Number of Hedge Fund Holders: 64
Toast Inc. (NYSE:TOST) is one of the best software infrastructure stocks to invest in. Earlier on June 4, Toast announced a significant philanthropic commitment: $5 million over the next 5 years to combat global food insecurity. The initiative begins with a US partnership with No Kid Hungry, which is a national campaign by Share Our Strength dedicated to ending childhood hunger.
The partnership primarily addresses summer hunger, which is a particularly vulnerable time for children who rely on school meals for their daily nutritional needs. Currently, only 13% of children who receive free or reduced-price meals during the school year have access to them in the summer. To combat this, Toast CEO and Co-Founder Aman Narang signed No Kid Hungry’s CEO Pledge to End Summer Hunger, which is an initiative aimed at increasing the number of children receiving summertime meals nationwide from 2.8 million to 31 million annually.
Efforts include encouraging the company’s restaurant customers and their guests to participate through Toast Fundraising campaigns. Additionally, Toast.org, which is the company’s philanthropic arm, is launching a new grant program to scale the impact of restaurants involved in local anti-hunger relief efforts across the US.
Toast Inc. (NYSE:TOST) operates a cloud-based digital technology platform for the restaurant industry in the US, Ireland, India, and internationally.
7. Global Payments Inc. (NYSE:GPN)
Number of Hedge Fund Holders: 65
Global Payments Inc. (NYSE:GPN) is one of the best software infrastructure stocks to invest in. On June 10, Global Payments announced the launch of its new Genius for Retail solution. The powerful Point-of-Sale/POS offering is specifically designed for small and medium-sized retail businesses, like sporting goods, gift shops, boutiques, and cafes.
Initially available to US merchants, the Genius for Retail solution is designed for ease of use right out of the box. The solution incorporates built-in tools that optimize operations and deliver a seamless customer experience. Other features include payment capabilities for accepting various payment methods like cards, mobile wallets, and gift cards, both in-store and on the go.
Genius for Retail provides business management options for streamlined inventory management, digital invoicing, pay-by-link functionality, employee scheduling, customer insights, staff permissions, and sales trend analysis, all consolidated in one platform. The Genius for Retail solution follows the launch of Genius for Restaurants earlier in May this year, which was the first of three Genius products tailored for specific verticals. The next product, Genius for Enterprise for multi-location quick-service restaurants, stadiums, venues, and cafeterias, is scheduled for release in Q3 2025.
Global Payments Inc. (NYSE:GPN) provides payment technology and software solutions for card, check, and digital-based payments in the Americas, Europe, and the Asia-Pacific.
6. Cloudflare Inc. (NYSE:NET)
Number of Hedge Fund Holders: 65
Cloudflare Inc. (NYSE:NET) is one of the best software infrastructure stocks to invest in. On June 26, Cloudflare was named a TIME100 Most Influential Company in 2025. This marks Cloudflare’s debut on the prestigious list, recognizing its extraordinary global impact, particularly its role in safeguarding the 2024 US elections from cyberattacks.
Cloudflare provided vital cybersecurity protection and ensured that cyberattacks did not influence the election outcome in 2024. Cloudflare’s commitment to election security is reflected in its Athenian Project, through which it provides its highest Enterprise level of services for free to eligible US state and local government websites related to election administration, voter data, or results reporting.
From January through November 2024, Cloudflare mitigated ~1 million online threats every single day for these entities. Cloudflare’s product expansion has enabled it to enter adjacent markets, projecting its TAM to grow from $181 billion in 2025 to $231 billion by 2028.
Cloudflare Inc. (NYSE:NET) operates as a cloud services provider that delivers a range of services to businesses worldwide.
5. Synopsys Inc. (NASDAQ:SNPS)
Number of Hedge Fund Holders: 67
Synopsys Inc. (NASDAQ:SNPS) is one of the best software infrastructure stocks to invest in. On June 26, Frost & Sullivan announced that Synopsys had been honored with the 2025 Global Technology Innovation Leadership Award in the analog in-memory computing/AIMC segment. The recognition highlights Synopsys’ AI-driven EDA suite and cloud-enabled design environment for accelerating AIMC development for next-gen, energy-efficient AI computing systems.
Synopsys was specifically lauded for providing engineers with tools that simplify analog complexity, which reduces design time and boosts productivity for AIMC-based system-on-chip (SoC) architectures. Key recognized solutions include Synopsys PrimeSim, which is an NVIDIA GPU-accelerated SPICE simulator achieving up to 15x speed-up (projected to 30x with NVIDIA Grace Blackwell), and Synopsys Custom Compiler paired with PrimeWave Design Environment for robust analog and mixed-signal design.
Additionally, Synopsys Cloud offers instant and browser-based access to the full EDA suite, which increases customer time to results by 40% on average. Other advanced capabilities mentioned are Synopsys ASO.ai for AI-driven layout-aware optimization and a mixed-signal flow providing 5x to 10x faster verification.
Synopsys Inc. (NASDAQ:SNPS) provides electronic design automation software products used to design and test integrated circuits. Frost & Sullivan helps investors, corporate leaders, and governments navigate economic changes and identify disruptive technologies, megatrends, and companies to action for a continuous flow of growth opportunities.
4. Twilio Inc. (NYSE:TWLO)
Number of Hedge Fund Holders: 73
Twilio Inc. (NYSE:TWLO)is one of the best software infrastructure stocks to invest in. On June 11, during Transform London, Twilio announced a partnership with Orange, which is a leading telecommunications operator, to expand the use of RCS Business Messaging across France. The collaboration aims to provide French and international businesses with a rich, interactive, and secure communication experience directly within their customers’ native messaging applications.
As of June 1 this year, RCS already covers over 70% of the mobile base in France, which represents more than 45 million smartphones, and is projected to reach 85% by the end of the year. Orange has selected Twilio’s expertise to facilitate this deployment. According to Twilio’s 2025 State of Customer Engagement Report, 3 out of 4 businesses intend to invest in RCS messaging this year, and 81% of consumers prefer RCS over traditional SMS.
As the natural evolution of SMS, the RCS protocol now functions on both Android and iOS devices, and supports features like images, carousels, actionable buttons, and detailed performance tracking. The partnership will enable businesses in France to boost customer engagement and maximize message reach. For the remaining segment of the mobile base not yet covered by RCS, Twilio ensures a seamless fallback to SMS and guarantees continuous service for all users.
Twilio Inc. (NYSE:TWLO) offers customer engagement platform solutions internationally. It operates through two segments: Twilio Communications and Twilio Segment.
3. Palo Alto Networks Inc. (NASDAQ:PANW)
Number of Hedge Fund Holders: 77
Palo Alto Networks Inc. (NASDAQ:PANW) is one of the best software infrastructure stocks to invest in. On June 11, Palo Alto Networks announced a partnership with Binary Defense to enhance the security operations of its Cortex XSIAM platform. The collaboration aligns with a growing industry focus on AI-driven cybersecurity solutions.
It aims to provide customers with flexible deployment options for XSIAM through implementation, co-managed, and fully managed security operations services. The partnership with Binary Defense, which is a managed detection and response/MDR provider, will integrate Binary Defense’s MDR expertise directly into customer instances of Cortex XSIAM, which is Palo Alto’s AI-powered platform.
This offers three levels of support: implementation services for onboarding and tuning XSIAM, a co-managed MDR option for shared operational responsibility, and a fully managed MDR service for end-to-end, expert-led coverage, which includes 24/7 threat hunting, detection, and response. These flexible models are designed to address security team challenges such as talent shortages and operational gaps, helping organizations modernize their Security Operations Centers/SOCs.
Palo Alto Networks Inc. (NASDAQ:PANW) provides cybersecurity solutions worldwide.
2. Oracle Corporation (NYSE:ORCL)
Number of Hedge Fund Holders: 97
Oracle Corporation (NYSE:ORCL) is one of the best software infrastructure stocks to invest in. On June 26, Oracle Red Bull Racing, which is the six-time world champion Formula One team, announced its adoption of the Oracle Fusion Cloud Applications Suite. This aims to accelerate operations by migrating finance and HR processes to the cloud, thereby increasing efficiency, reducing costs, and supporting compliance with Formula One’s fixed annual cost cap.
Previously relying on manual and spreadsheet-based financial planning, Oracle Red Bull Racing needed a unified view of its business data. The Oracle Fusion Cloud Applications Suite will connect finance, HR, and customer experience data on a single integrated cloud platform.
Some key components include the Oracle Fusion Cloud Enterprise Performance Management/EPM, which is part of Oracle Fusion Cloud Enterprise Resource Planning/ERP, and will enhance visibility, optimize planning & budgeting, and improve resource allocation. Oracle Fusion Cloud Human Capital Management/HCM will provide more detailed workforce insights, simplify HR processes & payroll, streamline talent recruitment, and boost the employee experience. The team already utilizes Oracle Fusion Cloud Customer Experience/CX to engage with fans through personalized content, members-only rewards, and a sophisticated loyalty program.
Oracle Corporation (NYSE:ORCL) offers products and services that address enterprise information technology environments worldwide.
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 284
Microsoft Corporation (NASDAQ:MSFT) is one of the best software infrastructure stocks to invest in. On June 26, Antigen Security, LLC, announced a new partner program with Microsoft, establishing Antigen as one of Microsoft’s Top 150 Managed Partners. The collaboration allows customers utilizing Microsoft 365 E3/E5 Security and Microsoft Azure Security to achieve an average of 20% to 60% savings on their cyber insurance premiums.
These savings are realized when Microsoft’s security suite is integrated into a risk-informed and standards-aligned cyber risk management strategy. The partnership uses Antigen’s expertise in cyber liability insurance underwriting and claims research alongside Microsoft’s advanced security products. Antigen’s risk management approach adheres to industry-leading frameworks and ensures a coverage strategy that promotes “Resilience by Design”.
As a Top 150 Managed Partner, Antigen will provide specialized training, marketing support, and incentives to various Microsoft channel partners. Antigen is also introducing 4 dedicated landing pages tailored for different audiences: New Microsoft Partners, Existing Microsoft Partners, New Microsoft Customers, and Existing Microsoft Customers.
Microsoft Corporation (NASDAQ:MSFT) develops and supports software, services, devices, and solutions.
While we acknowledge the potential of MSFT to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than MSFT and that has 100x upside potential, check out our report about the cheapest AI stock.
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Disclosure: None.
