11 Hot Software Stocks to Buy Now

Page 9 of 9

1. Microsoft Corporation (NASDAQ:MSFT)

6-Month Share Price Gain: 27.41%    

Number of Hedge Fund Holders: 284

With strong share price gains and significant hedge fund interest, Microsoft Corporation (NASDAQ:MSFT) secures a spot on our list of the 11 Hot Software Stocks to Buy Now.

On July 31, 2025, Barclays raised its price target on Microsoft Corporation (NASDAQ:MSFT) from $550 to $625, maintaining an ‘Overweight’ rating. This price revision follows the company’s strong Q4 FY25 results.

Microsoft Corporation (NASDAQ:MSFT) recorded a 3.5% revenue beat and a 7% operating profit beat, resulting in a 180-basis-point margin growth. Furthermore, over the past year, the company posted a 69.07% gross margin and 14.13% revenue growth. Its Azure platform led the charge, growing 39% YoY in constant currency, exceeding both guidance and investor expectations.

Furthermore, the investment firm highlighted the company’s dominant position in the software market, making it one of the hot stocks to buy. With expectations of continued traditional cloud migrations and the scaling of generative AI, Microsoft Corporation (NASDAQ: MSFT) offers significant upside potential.

Known for Windows, Office, and Azure platforms, Microsoft Corporation (NASDAQ:MSFT) develops and markets software, cloud services, hardware, and AI 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 this cheapest AI stock.

READ NEXT: Bill Ackman Stock Portfolio: Top 10 Stock Picks and 13 Best Oil Refinery Stocks to Buy Right Now.

Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email below.

Page 9 of 9