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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Our 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.
8. Unity Software Inc. (NYSE:U)
6-Month Share Price Gain: 58.03%
Number of Hedge Fund Holders: 52
Unity Software Inc. (NYSE:U) is included in our list of the 11 Hot Software Stocks to Buy Now.
On August 6, 2025, Unity Software Inc. (NYSE:U) reported results for Q2 2025. While the company slightly missed earnings expectations, it reported revenue that exceeded guidance by $16 million. Meanwhile, adjusted EBITDA reached $90 million, exceeding expectations by $15 million.
Unity Software Inc. (NYSE:U)’s partnerships with Tencent, Scopely, Nintendo, and major automakers helped the company expand its footprint beyond the gaming sector. The Vector segment resulted in a 15% sequential growth for Unity Ads, offsetting softness in other ad products. Meanwhile, the Create segment experienced a double-digit subscription growth, thanks to the rapid adoption of Unity 6.2. The company reported EPS of negative $0.26, compared to negative $0.25 expected.
Following the earnings release, on August 7, Morgan Stanley raised its price target from $25 to $40, maintaining an ‘Overweight’ rating. The investment firm also increased FY26 and FY27 EBITDA forecasts by 8% and 19%, respectively.
Unity Software Inc. (NYSE:U) serves gaming, entertainment, and various other industries worldwide with its real-time 3D content creation platform. It is included in our list of the hot stocks to buy.
7. PTC Inc. (NASDAQ:PTC)
6-Month Share Price Gain: 21.54%
Number of Hedge Fund Holders: 57
With strong share price gains and significant hedge fund interest, PTC Inc. (NASDAQ:PTC) secures a spot on our list of the 11 Hot Software Stocks to Buy Now.
On July 31, 2025, Barclays lifted its price target on PTC Inc. (NASDAQ:PTC) from $203 to $233, maintaining an ‘Overweight’ rating. This price revision came a day after the company’s earnings release for Q3.
PTC Inc. (NASDAQ:PTC)’s EPS of $1.64 exceeded expectations, while ARR reached $2.37 billion, thanks to 9.3% constant currency growth. Meanwhile, free cash flow hit $242 million, representing a 14% YoY increase. The strong performance was attributed to progress in its go-to-market transformation, steady pipeline creation, and stronger collaboration across teams.
Additionally, during the quarter, PTC Inc. (NASDAQ:PTC) released Creo 12, which features AI-driven generative design, and Arena Supply Chain Intelligence for AI-enabled risk monitoring. It also finalized deals with med-tech, automotive, and aerospace companies. Furthermore, it’s progressing well within “physical AI” with its ongoing collaboration with NVIDIA.
Looking ahead, PTC Inc. (NASDAQ:PTC) expects full-year ARR growth of 8%-9%. It also raised the low end of free cash flow guidance to roughly $850 million.
Focusing on product lifecycle management, computer-aided design, and industrial IoT, PTC Inc. (NASDAQ:PTC) delivers software solutions to help industrial and manufacturing companies increase the efficiency of their product design, manufacturing, operations, and service. It is included in our list of the hot stocks to buy.
6. Cloudflare, Inc. (NYSE:NET)
6-Month Share Price Gain: 22.77%
Number of Hedge Fund Holders: 65
Cloudflare, Inc. (NYSE:NET) is included in our list of the 11 Hot Software Stocks to Buy Now.
On August 1, 2025, Scotiabank raised its price target on Cloudflare, Inc. (NYSE:NET) from $135 to $200, maintaining a ‘Sector Perform’ rating. This price revision came a day after the company reported its second-quarter results.
For Q2, Cloudflare, Inc. (NYSE:NET) reported annualized revenue of over $2 billion with 28% YoY growth. Its revenue reached $512.3 million, which exceeded expectations. Furthermore, its non-GAAP operating income reached $72.3 million, bringing the margin to 14.1%.
Cloudflare, Inc. (NYSE:NET)’s leadership cited stronger demand, larger and longer-term deals, and strategic wins in AI-driven content creator solutions. The company is well-positioned to capitalize on the emerging ‘agentic web,’ a new phase of the internet marked by autonomous, goal-driven interactions.
With gross margins of 76.3%, Cloudflare, Inc. (NYSE:NET) closed the quarter with approximately $4 billion in cash. Looking ahead, it expects FY25 revenue of $2.113-$2.116 billion and Q3 revenue of $544.5 million on the higher side.
With its vast connectivity cloud platform, Cloudflare, Inc. (NYSE:NET) delivers cloud-based networking, security, and performance solutions. It is included in our list of the hot stocks to buy.
5. Palantir Technologies Inc. (NASDAQ:PLTR)
6-Month Share Price Gain: 68.66%
Number of Hedge Fund Holders: 77
With strong share price gains and significant hedge fund interest, Palantir Technologies Inc. (NASDAQ:PLTR) secures a spot on our list of the 11 Hot Software Stocks to Buy Now.
On August 5, 2025, Goldman Sachs raised its price target on Palantir Technologies Inc. (NASDAQ:PLTR) from $90 to $141, maintaining a ‘Neutral’ rating. The company’s share price has grown by over 5x in the past year. Rising enterprise adoption has fueled the company’s recent growth, increasing investor confidence.
The price revision comes after a solid Q2 performance. The company’s total revenue grew 48% YoY, reaching just over $1 billion. During the quarter, Palantir Technologies Inc. (NASDAQ:PLTR) closed a record-setting $2.27 billion of total contract value, a 222% YoY growth. Furthermore, the company raised its FY25 revenue guidance to 45% and U.S. commercial revenue guidance to 85% YoY, beating estimates. Meanwhile, customer count increased by 43% YoY and 10% quarter-over-quarter.
Goldman Sachs cited the company’s strong fundamentals and the early-stage potential of the custom AI software market. At the same time, the investment firm remains wary of the increasing competition, which could potentially impact the company’s dominant position.
Palantir Technologies Inc. (NASDAQ:PLTR) enables strategic, operational, and security decision-making for enterprises and governments with its AI-driven software platforms. It is included in our list of the hot stocks to buy.
4. Intuit Inc. (NASDAQ:INTU)
6-Month Share Price Gain: 29.39%
Number of Hedge Fund Holders: 87
Intuit Inc. (NASDAQ:INTU) is included in our list of the 11 Hot Software Stocks to Buy Now.
On July 28, 2025, Oppenheimer raised its price target on Intuit Inc. (NASDAQ:INTU) from $742 to $868, maintaining an ‘Outperform’ rating. This price revision comes ahead of the company’s FY25 close. With the Consumer segment regaining momentum, the investment firm expects a strong finish to the year. Meanwhile, TurboTax, the company’s software for the preparation of income tax returns, is driving mid-single-digit growth in paying units in FY25 with a successful marketing strategy.
Looking ahead, the investment firm expects increasing tax code complexity, which could increase demand for and adoption of Intuit Inc. (NASDAQ:INTU)’s TurboTax Live platform. As a result, the analyst projects growth in average revenue per user for the company. Meanwhile, analyst confidence in INTU’s Global Business Solutions segment remains intact, while Credit Karma’s growing momentum continues. Furthermore, the analyst expects continued growth for the company with Intuit Assist, its AI-powered tool, continuing to enhance operational efficiency and execution.
Known for software like QuickBooks, TurboTax, and Credit Karma, Intuit Inc. (NASDAQ:INTU) offers financial management, tax preparation, and credit services software. It is included in our list of the hot stocks to buy.
3. Oracle Corporation (NYSE:ORCL)
6-Month Share Price Gain: 43.33%
Number of Hedge Fund Holders: 97
With strong share price gains and significant hedge fund interest, Oracle Corporation (NYSE:ORCL) secures a spot on our list of the 11 Hot Software Stocks to Buy Now.
On August 8, 2025, Oracle Corporation (NYSE:ORCL) was recognized as a Leader in Gartner’s Magic Quadrant for Strategic Cloud Platform Services for the third consecutive year. This highlights increasing global demand for the company’s AI infrastructure and distributed cloud capabilities.
On the previous day, Oracle Corporation (NYSE:ORCL) launched its Globally Distributed Exadata Database on Exascale Infrastructure. With this launch, the company enables mission-critical applications to operate seamlessly across OCI regions globally. It offers always-on availability, petabyte-scale AI processing, and flexible serverless scaling.
Meanwhile, on August 6, 2025, Oracle Corporation (NYSE:ORCL)’s Oracle Financial Services achieved top honors from Celent across six digital banking evaluations. The recognition includes “Luminary” status in Corporate Digital Banking Reports and XCelent Awards for “Breadth of Functionality” in retail and SMB banking platforms.
Thus, Oracle Corporation (NYSE:ORCL) is strengthening its leadership across AI, cloud, data management, and financial services technology with these achievements.
Oracle Corporation (NYSE:ORCL) offers integrated cloud applications and secure, autonomous infrastructure. It helps businesses run workloads efficiently. It is included in our list of the hot stocks to buy.
2. Uber Technologies, Inc. (NYSE:UBER)
6-Month Share Price Gain: 20.05%
Number of Hedge Fund Holders: 145
Uber Technologies, Inc. (NYSE:UBER) is included in our list of the 11 Hot Software Stocks to Buy Now.
On August 7, 2025, UBS raised its price target on Uber Technologies, Inc. (NYSE:UBER) to $117 from $115, maintaining a ‘Buy’ rating. On the same day, Wells Fargo decreased its price target on UBER from $120 to $119, maintaining an ‘Overweight’ rating.
UBS’s price target increase is driven by Uber Technologies, Inc. (NYSE:UBER)’s stronger-than-expected growth in both mobility and delivery, steady trip gains, and favorable delivery pricing trends. Additionally, the company’s strong financial health, particularly $5.23 billion in EBITDA, caught analysts’ attention.
Meanwhile, Wells Fargo’s price target reduction reflects its reduction of the 2026 EBITDA forecast by 1% due to higher investments. Yet, the investment firm projects a strong growth outlook for Uber Technologies, Inc. (NYSE:UBER), driven by promising early results from the company’s Austin partnership with Waymo. Its partnership with Waymo is experiencing strong vehicle deployments, which are outpacing forecasts and boosting volumes without eroding existing business. Furthermore, Trendyol Go is expected to add $620 million in Q3 gross bookings.
Uber Technologies, Inc. (NYSE:UBER) is known for its global mobility, delivery, and freight platform, connecting riders, drivers, consumers, and couriers. It is included in our list of the hot stocks to buy.
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.
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