In this article, we discuss the 11 Hot Software Stocks to Buy Now.
Once considered a novel idea, Artificial Intelligence (AI) has evolved into being the single most disruptive force, shaping the technology landscape as well as the stock market. Initially known as a job creator and innovation engine, AI is turning around business models, reshaping labor markets, and driving the winners and losers within the software market. One tech giant’s rise to a nearly $4.5 trillion valuation is the biggest example of a “success story” within this AI-led transformation. On the other hand, steep declines in companies like Adobe, Wix, and Shutterstock demonstrate the perils of trailing in the race.
Meanwhile, the rapid adoption of AI is accelerating disruption. What once took years now unfolds in months. As such, industries that rely significantly on services or entry-level roles are under immense pressure, shutting down coding bootcamps and slowing down junior tech hiring. According to reports, several Gen Z graduates are facing difficulties in finding jobs in a field that once couldn’t hire fast enough.
Thus, as AI continues to take over, investors are shifting their focus to companies that are ready to capitalize on AI technology, rather than companies likely to be left behind. With this backdrop, we must shed light on our list of the 11 Hot Software Stocks to Buy Now to focus on companies that are likely to grow, driven by their usage of AI to innovate, boost efficiency, and protect their competitive edge.
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Methodology
To curate our list of the 11 Hot Software Stocks to Buy Now, we used the Finviz screener to extract a list of software companies with a 6-month return of over 20%. Next, we assessed the hedge fund sentiment surrounding these stocks using Insider Monkey’s hedge fund database, which tracks over 1,000 hedge funds. Finally, we ranked these stocks in ascending order based on the number of hedge funds holding stakes in the respective stocks, 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. JFrog Ltd. (NASDAQ:FROG)
6-Month Share Price Gain: 21.74%
Number of Hedge Fund Holders: 43
With strong share price gains and significant hedge fund interest, JFrog Ltd. (NASDAQ:FROG) secures a spot on our list of the 11 Hot Software Stocks to Buy Now.
On August 8, 2025, Raymond James raised its price target on JFrog Ltd. (NASDAQ:FROG) from $50 to $55, maintaining an ‘Outperform’ rating. This price revision is driven by the company’s strong Q2 results, which were announced the day before.
JFrog Ltd. (NASDAQ:FROG)’s revenue and forward guidance exceeded the analyst’s estimates. Thanks to over-consumption and larger customer commitments, both Cloud and subscriber growth accelerated. The Cloud segment’s revenue increased by 45% year-over-year, and it represented 45% of total revenue. Meanwhile, total revenue reached $127.2 million, an increase of 23% YoY. For Q3, FROG expects total revenue to range between $127 and $129 million.
Still, the analyst believes that guidance remains overly conservative, indicating upside potential. Looking ahead, Raymond James feels optimistic about the company’s growth momentum, driven by its upcoming SwampUp user conference in early September.
JFrog Ltd. (NASDAQ:FROG) helps organizations store, manage, curate, and monitor software packages with its global software supply chain platform. It is included in our list of the hot stocks to buy.
10. VeriSign, Inc. (NASDAQ:VRSN)
6-Month Share Price Gain: 22.81%
Number of Hedge Fund Holders: 45
VeriSign, Inc. (NASDAQ:VRSN) is included in our list of the 11 Hot Software Stocks to Buy Now.
A day after its earnings release, on July 25, 2025, Baird raised its price target on VeriSign, Inc. (NASDAQ:VRSN) from $305 to $340, maintaining an ‘Outperform’ rating.
VeriSign, Inc. (NASDAQ:VRSN)’s EPS, which stood at $2.21 during the quarter, slightly missed the $2.24 consensus. Improving domain registration trends and stronger renewal rates, particularly in Asia-Pacific, resulted in a 5.9% revenue growth, bringing it to $410 million. The company ended the quarter with 170.5 million .com and .net domain names, which is an increase of 660,000 compared to last quarter.
Looking ahead, VeriSign, Inc. (NASDAQ:VRSN) raised its full-year domain base growth outlook to 1.2%-2.0%. Furthermore, during the quarter, the company returned $235 million to shareholders through dividends and buybacks, expanding its repurchase authorization to $1.5 billion. VeriSign maintains its focus on stability and security, as evident from the fact that this year marks 28 consecutive years of 100% DNS availability. For the full year, it expects $1.645-$1.655 billion in revenue and $1.117-$1.127 billion in operating income.
VeriSign, Inc. (NASDAQ:VRSN) delivers critical internet infrastructure, including the .com and .net domain registries. It is included in our list of the hot stocks to buy.
9. Zscaler, Inc. (NASDAQ:ZS)
6-Month Share Price Gain: 31.22%
Number of Hedge Fund Holders: 46
With strong share price gains and significant hedge fund interest, Zscaler, Inc. (NASDAQ:ZS) secures a spot on our list of the 11 Hot Software Stocks to Buy Now.
On July 23, 2025, Evercore ISI reiterated its ‘Buy’ rating on Zscaler, Inc. (NASDAQ:ZS) with a $290 price target. A few days later, on August 5, 2025, Cantor Fitzgerald also maintained its ‘Buy’ rating with a $340 price target. These bullish ratings follow the company’s acquisition of Red Canary, a leader in AI-driven threat management. The acquisition was announced on August 1, 2025.
While Red Canary will initially operate as a separate unit, it will integrate its agentic AI technology with Zscaler, Inc. (NASDAQ:ZS)’s Data Fabric for Security. The result of this integration will be the industry’s most comprehensive Security Operations Center solutions. Relying on 500 billion daily transactions on the Zscaler Zero Trust Exchange, the integrated platform is expected to enhance detection, investigation, and response times. It will also unify security operations for customers and partners globally.
With its global Zero Trust cloud security platform, Zscaler, Inc. (NASDAQ:ZS) enables secure user, device, and application connectivity, preventing cyberattacks and data loss. It is included in our list of the hot stocks to buy.
