In this article, we will take a look at the 13 Best Software Stocks to Buy Right Now.
The software industry is evolving at an unprecedented pace, with significant advancements in coding languages, structures, frameworks, methodologies, and other technologies. More specifically, the industry has benefited significantly from the increased demand for digital transformation. Until recently, the growth outlook appeared promising due to the increasing use of Software-as-a-Service (SaaS), which provides an adaptive and cost-effective distribution mechanism for apps.
In that sense, the global SaaS sector was estimated at over $3 trillion in 2022, capping a decade of rapid growth, with McKinsey forecasting that it might reach $10 trillion by 2030.
At the same time, disruption is being accelerated by AI’s rapid adoption. Industry sectors that heavily depend on services or entry-level positions are therefore under tremendous strain, closing coding boot programs and delaying the hiring of junior tech. This is further evidenced by reports stating that a growing number of Gen Z graduates are having trouble obtaining employment in a field that used to have fairly rapid hiring rates some years ago.
Our Methodology
To compile our list of the best software stocks to buy, we used the Finviz stock screener to look for U.S.-listed companies in the industry with strong fundamentals. We then ranked them according to the number of hedge funds that held stakes in them as of the second quarter of 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).
13. Cloudflare, Inc. (NYSE:NET)
Number of Hedge Fund Holders: 59
Cloudflare, Inc. (NYSE:NET) ranks among the best software stocks to buy right now. On August 29, following a meeting with Cloudflare’s CEO Matthew Prince at its 2025 Tech Executive Summit, Stifel reaffirmed its Buy rating and $230 price target for Cloudflare, Inc. (NYSE:NET). The firm expressed confidence in Cloudflare’s prospects across multiple focus areas and spoke with Prince about several subjects, including Act 4, Zero Trust, AI, and Cloudflare’s organizational maturity.
Stifel believes Cloudflare, Inc. (NYSE:NET) can grow by 25%-30%+ in the following years, while also expanding operating margin and free cash flow, thanks to its expanding portfolio and ongoing go-to-market enhancements.
For the upcoming years, the firm states that Cloudflare, Inc. (NYSE:NET) provides “the most upside optionality” in its coverage universe.
Cloudflare, Inc. (NYSE:NET) is a cloud-based cybersecurity and website management company that also offers routing and developer security solutions. It operates in numerous main categories, including Security Solutions, Performance Enhancement, Reliability, Zero Trust Infrastructure, and others.
12. Elastic N.V. (NYSE:ESTC)
Number of Hedge Fund Holders: 59
Elastic N.V. (NYSE:ESTC) ranks among the best software stocks to buy right now. UBS maintained its Buy rating on Elastic N.V. (NYSE:ESTC) following the company’s impressive first-quarter results, raising its price target from $95 to $125 on August 29.
The company announced a 20% increase in its total revenue, greatly above investor estimates of 17% and beating the high end of guidance by 4.3%, the most significant beat in over three years.
According to UBS, Elastic’s revised revenue growth projection for fiscal year 2026 of 14% (up from 13% before) is “increasingly conservative.” Based on the firm’s estimations, Elastic N.V. (NYSE:ESTC) could grow by 18% in FY26, assuming quarterly revenue additions continue in the same manner as the previous year for the rest of the fiscal year.
Elastic N.V. (NYSE:ESTC) is a software company that offers solutions for search, logging, analytics, security, and observability needs.
11. Zscaler, Inc. (NASDAQ:ZS)
Number of Hedge Fund Holders: 60
Zscaler, Inc. (NASDAQ:ZS) ranks among the best software stocks to buy right now. On August 28, Cantor Fitzgerald restated its Overweight rating on Zscaler, Inc. (NASDAQ:ZS) and maintained its $340 price target for the cybersecurity company’s stock.
The firm’s decision reflects its anticipation of Zscaler’s second-half billings acceleration, which will be driven by increased adoption of the company’s cloud security products, privacy solutions, and artificial intelligence analytics capabilities.
According to Cantor Fitzgerald, Zscaler, Inc. (NASDAQ:ZS) will likely be able to restore its historical position of trading at a premium in comparison to its industry peers owing to the expected performance improvements.
Zscaler, Inc. (NASDAQ:ZS), based in San Jose, California, is a well-known cybersecurity company that offers solutions for securing private networks, managing platform access, and ensuring regulatory compliance.
10. CrowdStrike Holdings, Inc. (NASDAQ:CRWD)
Number of Hedge Fund Holders: 66
CrowdStrike Holdings Inc. (NASDAQ:CRWD) ranks among the best software stocks to buy right now. On August 28, Truist Securities reaffirmed its Buy rating for CrowdStrike Holdings Inc. (NASDAQ:CRWD) with a $500 price target, pointing to the company’s Falcon Flex offering’s successful acceptance and robust platform demand.
In every parameter, CrowdStrike’s findings surpassed the upper limit of its guidance. Management increased its fiscal year 2026 guidance as a result of this success, anticipating that second-half net new annual recurring revenue (NNARR) would increase by more than 40% year-over-year.
The Falcon Flex program has exceeded expectations, with over 1,000 customers embracing the service and over 100 already “re-flexing,” resulting in larger transactions and vendor consolidation that benefits CrowdStrike Holdings Inc. (NASDAQ:CRWD). According to Truist Securities, Flex and emerging products currently account for over $1.56 billion in business and are expanding at a rate of more than 40% year-over-year.
CrowdStrike Holdings Inc. (NASDAQ:CRWD) is a pioneer in cloud workload and endpoint protection powered by AI.
9. Synopsys, Inc. (NASDAQ:SNPS)
Number of Hedge Fund Holders: 66
Synopsys, Inc. (NASDAQ:SNPS) ranks among the best software stocks to buy right now. In a research note released on August 22, Goldman Sachs reaffirmed its Buy rating on Synopsys, Inc. (NASDAQ:SNPS) with a $700 price target. Although the firm anticipates that Synopsys will produce in-line underlying results, it advised caution regarding possible volatility associated with the Ansys integration. According to Goldman Sachs, market sentiment seemed to be “skewed slightly positive” in spite of earlier worries over China’s EDA export restrictions.
That said, Goldman Sachs expects that the Ansys merger dynamics may be unclear due to non-comparable reporting, mismatched quarters, and the fact that several analysts have not revised their expectations for the deal.
Despite the possibility of a turbulent quarter, the firm believes Synopsys, Inc. (NASDAQ:SNPS) will perform better due to increased cost synergies and the alignment of physical simulation and semiconductor technology.
Synopsys, Inc. (NASDAQ:SNPS) is a technology company that offers engineering solutions to help customers create and innovate AI-powered products ranging from silicon chips to entire systems.
8. Autodesk, Inc. (NASDAQ:ADSK)
Number of Hedge Fund Holders: 73
Autodesk, Inc. (NASDAQ:ADSK) ranks among the best software stocks to buy right now. Citing what it called one of the “cleanest” prints in the applications and software-as-a-service industry this earnings season, UBS maintained its Buy rating on Autodesk, Inc. (NASDAQ:ADSK) and increased its price target from $370 to $385 on August 29.
The firm cited Autodesk’s second-quarter revenue and billings beats as the best in previous quarters, with both sustaining adjusted constant currency growth in the low teens and pushing into the 20s. This solid performance prompted Autodesk, Inc. (NASDAQ:ADSK) to lift its fiscal year 2026 target at the upper end to 10% from 9% on revenues and to 19% from 18% on billings, both adjusted for constant currency.
Autodesk’s second-quarter EBIT margin of 39% was also deemed solid by UBS, which added that the roughly 25 basis point increase to the fiscal year 2026 EBIT margin guidance was “likely good enough.”
Autodesk, Inc. (NASDAQ:ADSK) is a leading software provider to designers, engineers, and builders. Its technology spans architectural, engineering, construction, product design, and manufacturing.
7. Workday, Inc. (NASDAQ:WDAY)
Number of Hedge Fund Holders: 76
Workday, Inc. (NASDAQ:WDAY) ranks among the best software stocks to buy right now. Following the company’s most recent earnings report, TD Cowen confirmed its Buy rating on Workday, Inc. (NASDAQ:WDAY) on August 22 with a price target of $310.
According to TD Cowen, Workday’s organic revenue outlook for fiscal year 2026 remains unchanged, with growth expected to resume in the second half of the year. The firm also stated that macroeconomic conditions are solid beyond the state, local, and education (SLED) sector.
The company noted Workday’s substantial advances in artificial intelligence and stated that additional information on annual recurring revenue (ARR) would be revealed at the company’s analyst day in September. Workday’s announcement of the Paradox acquisition was also brought up by TD Cowen.
Workday, Inc. (NASDAQ:WDAY) is a global leader in enterprise cloud software, focusing on financial and human resource solutions.
6. Palo Alto Networks, Inc. (NASDAQ:PANW)
Number of Hedge Fund Holders: 77
Palo Alto Networks, Inc. (NASDAQ:PANW) ranks among the best software stocks to buy right now. In light of Palo Alto Networks, Inc. (NASDAQ:PANW)’s fourth-quarter fiscal performance, TD Cowen reaffirmed its Buy rating on the company on August 19 with a $230 price target. According to TD Cowen, the macroeconomic climate appears to be favorable for the cybersecurity company.
The firm emphasized that management is on track to meet its $15 billion annual recurring revenue target by fiscal year 2030, thanks to solid execution and rising platform metrics. Solid fundamentals were also cited as bolstering a more optimistic view for fiscal year 2026.
Palo Alto Networks, Inc. (NASDAQ:PANW)’s acquisition of CyberArk has also garnered strong feedback from TD Cowen, which noted that the combined company’s free cash flow margin is anticipated to surpass 40% in fiscal year 2028.
Palo Alto Networks, Inc. (NASDAQ:PANW) is a leading cybersecurity company that provides a variety of products such as firewalls, malware protection, and cloud security.
5. Block, Inc. (NYSE:XYZ)
Number of Hedge Fund Holders: 79
Block Inc. (NYSE:XYZ) ranks among the best software stocks to buy right now. On August 22, Keefe, Bruyette & Woods reaffirmed its Outperform rating and $95 price target for Block Inc. (NYSE:XYZ). The firm expressed confidence in Block’s development trajectory for the rest of the year, citing an expected growth uptick in both of the company’s business areas.
According to the firm, Block Inc. (NYSE:XYZ) is positioned as an appealing investment opportunity in the present market climate, and the firm’s research report advises investors to hold the payment technology company’s stock through the end of the year.
Block’s next investor day in November was also noted by KBW as a possible catalyst for the stock. The firm believes that this event will provide “a compelling growth narrative for 2026 and beyond” that might further bolster the company’s worth.
Block Inc. (NYSE:XYZ), formerly known as Square Inc., is an American public company that has multiple operations within the financial technology sector.
4. Adobe Inc. (NASDAQ:ADBE)
Number of Hedge Fund Holders: 104
Adobe Inc. (NASDAQ:ADBE) ranks among the best software stocks to buy right now. On August 29, UBS reduced its price target for Adobe Inc. (NASDAQ:ADBE) to $400 from $430 and retained a Neutral rating ahead of the company’s third-quarter earnings report on September 11. The adjustment was made after UBS analyst Karl Keirstead spoke with customers and partners to examine current market trends for Adobe products.
According to UBS, Adobe’s medium-term artificial intelligence risks will likely continue, though near-term demand and usage of the company’s products seem to be “holding up relatively well.” Despite the price target drop, UBS maintained its fiscal year 2025 projections for Adobe Inc. (NASDAQ:ADBE).
Adobe Inc. (NASDAQ:ADBE) is a world leader in software creation, known for its cutting-edge digital media solutions. Its major products, including Photoshop and Acrobat are essential tools for creative sectors and organizations across the globe.
3. Intuit Inc. (NASDAQ:INTU)
Number of Hedge Fund Holders: 105
Intuit Inc. (NASDAQ:INTU) ranks among the best software stocks to buy right now. On August 22, KeyBanc maintained its Overweight rating on Intuit Inc. (NASDAQ:INTU) but reduced its price target from $850 to $825. The change comes after Intuit’s fiscal fourth-quarter results, which, in spite of the lowered projection for fiscal year 2026, showed revenue and non-GAAP operating income above Street expectations.
KeyBanc attributed the target drop to tighter pricing comparisons compared to fiscal 2025 and ongoing Mailchimp headwinds, which are predicted to impact growth by 150 basis points in fiscal 2026.
That said, the firm pointed out that while core QuickBooks Online ecosystem revenues increased by 18% in the fourth quarter, Intuit’s midmarket online ecosystem continues to do well, with revenue up 40%, which is consistent with the rest of fiscal 2025.
Intuit Inc. (NASDAQ:INTU) is a global financial technology platform that enables both individuals and organizations to achieve their financial goals. Its products include Mailchimp for email marketing, QuickBooks for company accounting, Credit Karma for financial management, and TurboTax for tax preparation.
2. ServiceNow, Inc. (NYSE:NOW)
Number of Hedge Fund Holders: 106
ServiceNow, Inc. (NYSE:NOW) ranks among the best software stocks to buy right now. On August 25, Stifel reaffirmed its $1,200 price target and Buy rating for ServiceNow, Inc. (NYSE:NOW), pointing to better federal business performance in the current quarter.
According to the firm’s research on government expenditure statistics through August 20, ServiceNow’s federal business is expected to grow by mid-single digits in the third quarter, up from a low double-digit drop in the second quarter.
Although the original statistics seemed to indicate a declining trend, Stifel pointed out that the upward trajectory was found by accounting for Department of Defense contracts, which are sometimes reported 90 days late, and the timing of a significant Veterans Affairs renewal worth $124 million.
ServiceNow, Inc. (NYSE:NOW) is a leading provider of cloud-based software solutions that enable corporations to streamline their digital workflows.
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 294
Microsoft Corporation (NASDAQ:MSFT) ranks among the best software stocks to buy right now. UBS maintained its $650 price target and Buy rating for Microsoft Corporation (NASDAQ:MSFT) on August 20, highlighting the company’s dominant position in artificial intelligence. The firm also stated that Microsoft’s recent price and license adjustments are anticipated to boost cloud revenues.
The bank reported that Microsoft Corporation (NASDAQ:MSFT) was “standardizing pricing across most of its customer tiers on EA contract types, with partners consistent in their feedback that this results in a net price increase.” Set to take effect on November 1, these changes apply to Microsoft’s Online Services package, which includes Azure, Microsoft 365/Office 365, and Dynamics 365.
According to UBS, the firm now has “marginally more confidence in our outlook for total c/c revenue growth of 14% in FY26E” and believes that Microsoft’s guidance reflected the new pricing.
Microsoft Corporation (NASDAQ:MSFT) is a leading technology company known for its core software products, which include the Windows OS, Microsoft 365 suite, and Edge browser. Its product portfolio includes corporate software, software development tools, video games, gaming gear, and cloud services.
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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