In this article, we will look at the 14 Best Software Stocks to Buy According to Wall Street Analysts.
On January 29, Michael Sansoterra, Silvant Capital CIO, appeared on a CNBC Television interview to discuss his outlook on the technology sector. He believes that the technology stocks will continue to exceed expectations and holds 6 “Magnificent Seven” stocks as his top holdings. He noted that what really matters for the investors is the earnings and free cash flow. Michael believes that as the large-cap companies continue to release earnings, investors are going to see these companies exceed earnings. He added that most of the large-cap tech stocks have strong fundamentals, which, coupled with earnings beats, will lead to continued performance for the sector.
That said, earlier on January 15, Gil Luria, D.A. Davidson & Co. managing director, appeared on a separate CNBC interview to discuss his bull case for the software sector. Luria noted that his bull case is based on a simple reality that software businesses are the best kind of businesses due to the recurring nature of revenue. He added that software businesses are not only recurring, but they scale well and offer high incremental margins. He noted that the current market sell-off is a market overreaction and that it might be a good chance to buy some good software stocks before they take off.
With that, let’s take a look at the 14 Best Software Stocks to Buy According to Wall Street Analysts.
Our Methodology
To curate the list of 14 Best Software Stocks to Buy According to Wall Street Analysts, we used the Finviz Stock Screener, CNN, and Insider Monkey’s Q3 2025 database. Using the screener, we aggregated a list of software stocks with more than 30% upside potential. Next, we cross-checked the analysts’ sentiment from CNN and ranked the stocks in ascending order of the upside potential. We have also added the number of hedge funds holding each stock as of Q3 2025, sourced from Insider Monkey’s database. Please note that the data was recorded on January 29, 2026.
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 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
14 Best Software Stocks to Buy According to Wall Street Analysts
14. Uber Technologies, Inc. (NYSE:UBER)
Number of Hedge Fund Holders: 143
Upside: 34.84%
Uber Technologies, Inc. (NYSE:UBER) is one of the Best Software Stocks to Buy According to Wall Street Analysts. On January 30, Justin Post from Bank of America Securities reiterated a Buy rating on the stock, but lowered the price target from $119 to $110. Earlier, on January 27, Mark Kelley from Stifel Nicolaus also reiterated a Buy rating on Uber Technologies, Inc. (NYSE:UBER) but lowered the price target from $122 to $105.
Justin Post from BofA noted that the rating comes ahead of the company’s Q4 earnings release expected on February 4. The analyst noted that they expect the company to post growth in bookings and also sees significant upside in revenue estimates. However, the firm expects EBITDA estimates for Uber to be around $2.47 billion, which is below Wall Street’s expectations of $2.48 billion. BofA noted that they expect slightly lower EBITDA to account for the company’s investment in growth.
On the other hand, analysts at Stifel highlighted concerns regarding the impact of robotaxis on Uber Technologies, Inc. (NYSE:UBER)’s business. However, the firm also acknowledged that the debate is not expected to be settled anytime soon. Although the firm lowered the price target slightly, they remain optimistic on the company’s near-term outlook.
Uber Technologies, Inc. (NYSE:UBER) operates as a technology platform that offers ride services and merchant delivery service providers for food, groceries, meal preparation, and other delivery services.
13. Palantir Technologies Inc. (NASDAQ:PLTR)
Number of Hedge Fund Holders: 81
Upside: 35.13%
Palantir Technologies Inc. (NASDAQ:PLTR) is one of the Best Software Stocks to Buy According to Wall Street Analysts. Wall Street is bullish on Palantir Technologies Inc. (NASDAQ:PLTR) ahead of its fiscal Q4 2025 results, expected to be announced on February 2.
Recently, on January 27, Mariana Perez Mora from Bank of America Securities reiterated a Buy rating on the stock without disclosing any price targets. However, earlier, on January 26, Rishi Jaluria from RBC Capital reiterated a Sell Rating on the stock with a $50 price target.
Management expects Q4 2025 revenue to be in the range of $1.327 billion and $1.331 billion, with income from operations around $695 million to $699 million. Wall Street expects revenue around $1.34 billion, along with a GAAP EPS of $0.18.
Analysts at RBC Capital noted that the conservative outlook on Palantir Technologies Inc. (NASDAQ:PLTR) is based on the government data tracker, which suggests a decline in qualified contract value and also a decline in annual contract value. However, RBC capital acknowledged that the uncertainty in geopolitics is anticipated to add long-term demand for the company. Moreover, the firm also highlighted that after talking with some customers of Palantir, they find customers reassessing their contracts with the company or moving away from the solutions. Overall, RBC Capital finds the company’s risk/reward situation inclined towards the negative side, hence a Sell rating.
Palantir Technologies Inc. (NASDAQ:PLTR) builds and deploys software platforms for the intelligence community to help in counterterrorism investigations and operations.
12. Cloudflare, Inc. (NYSE:NET)
Number of Hedge Fund Holders: 63
Upside: 40.54%
Cloudflare, Inc. (NYSE:NET) is one of the Best Software Stocks to Buy According to Wall Street Analysts. On January 28, Keith Wess from Morgan Stanley reiterated a Buy rating on the stock with a $258 price target. Earlier, on January 27, Shaul Eyal from TD Cowen also reiterated a Buy rating on the stock with a $265 price target.
The ratings come ahead of the company’s Q4 2025 earnings release, scheduled for February 10. Management expects Q4 revenue in the range of $588.5 million to $589.5 million, along with a non-GAAP income of $83 million to $84 million. Wall Street expects Cloudflare, Inc. (NYSE:NET) to post roughly $591.36 million as quarterly revenue with a GAAP EPS of negative $0.03.
Analysts at TD Cowen noted that bullish sentiment is based on the company’s AI infrastructure gaining momentum. The firm finds the company’s AI infrastructure, especially the Cloudflare Tunnel, to be one of the most secure ways of deploying AI agents online. The firm noted that the system is used by more than 80% of the top 50 AI companies. Moreover, TD Cowen noted that the buzz around Clawdbot has linked its popularity to the company’s edge solutions for AI agent deployment and security.
TD Cowen expects Cloudflare, Inc. (NYSE:NET) to beat earnings expectations in Q4 2025.
Cloudflare, Inc. (NYSE:NET) operates as a cloud services provider. Its composable platform and network offer advanced PQC (post-quantum cryptography) capabilities, which enable companies to protect users, applications, and networks across all endpoints and infrastructure.
11. Adobe Inc. (NASDAQ:ADBE)
Number of Hedge Fund Holders: 88
Upside: 41.10%
Adobe Inc. (NASDAQ:ADBE) is one of the Best Software Stocks to Buy According to Wall Street Analysts. Adobe Inc. (NASDAQ:ADBE) is trading close to its 52-week lows. However, Wall Street maintains a positive sentiment, with analysts’ 12-month price targets reflecting more than 40% upside from the current levels.
Recently, on January 26, Karl Keirstead from UBS reiterated a Hold rating on the stock and lowered the price target from $375 to $340. Earlier, on January 12, Gabriela Borges from Goldman Sachs downgraded the stock to a Sell rating from Buy and maintained a price target of $290.
Analysts at Goldman Sachs noted relatively weaker growth metrics as one of the main reasons behind the undervalued PEG ratio. The firm noted that Adobe Inc. (NASDAQ:ADBE) projects around 10% revenue growth over the next 12 months, which lags behind its peers with 11% growth expectations. Moreover, the next 12 months’ EPS growth of 10% also trails behind the 18% growth expectations from its peers. The firm noted that this places the company in the bottom quartile for PEG valuation. On the bright side, fiscal 2026 EPS is forecasted at $22.69, signaling sustained profitability.
Adobe Inc. (NASDAQ:ADBE) is a global leader in digital media and digital marketing solutions. It provides creator tools and services to individuals, teams, and enterprises to create, publish, and promote content.
10. Snowflake Inc. (NYSE:SNOW)
Number of Hedge Fund Holders: 102
Upside: 42.80%
Snowflake Inc. (NYSE:SNOW) is one of the Best Software Stocks to Buy According to Wall Street Analysts. On January 30, Koji Ikeda from Bank of America Securities reiterated a Buy rating on the stock and lowered the price target from $310 to $275. Earlier, on January 27, Sanjit Singh from Morgan Stanley reiterated a Buy rating on Snowflake Inc. (NYSE:SNOW) with a $299 price target.
Analysts at BofA noted that they continue to see Snowflake Inc. (NYSE:SNOW) as one of the top infrastructure software stocks. The decline in price target reflects a newer valuation model that encompasses an updated growth outlook, risks, and peer review.
On the other hand, Singh from Morgan Stanley noted that the company has faced stock price weakness and concerns regarding its ability to post an earnings beat in Q4. He highlighted that despite these concerns, the company is moving towards one of the strongest sequential Q4 growth in years. Singh also finds management’s guidance to be prudent as it includes all the headwinds.
Snowflake Inc. (NYSE:SNOW) is an American cloud-based data storage company that provides a platform for data analysis and simultaneous access to large datasets with low latency. The platform is based on AWS, Microsoft Azure, and Google Cloud Platform.
9. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 312
Upside: 47.16%
Microsoft Corporation (NASDAQ:MSFT) is one of the Best Software Stocks to Buy According to Wall Street Analysts. On January 30, Tyler Radke from Citi reiterated a Buy rating on the stock but lowered the price target from $660 to $540. Earlier, on January 29, Karl Keirstead from UBS also reiterated a Buy rating on Microsoft Corporation (NASDAQ:MSFT) with a $600 price target.
The ratings follow the company’s fiscal Q2 2026 earnings release announced on January 28. The company grew its quarterly revenue by 16.72% year-over-year to $81.27 billion and topped the estimates by $993.68 million. Moreover, the EPS of $4.14 also topped the consensus by $0.22.
Revenue growth was driven by a 10% increase in Productivity and Business Processes and a 21% year-over-year increase in Intelligent Cloud revenue. UBS noted that despite the impressive results, the share price traded downwards after the release, mainly due to the 38% growth in Azure cloud services, which was expected to meet the 39% growth target.
UBS explained that Microsoft Corporation (NASDAQ:MSFT) made a strategic choice of prioritizing scarce GPU capacity for its own first-party products over Azure cloud services. The firm believes that this allocation difference can be one of the reasons the company slightly missed the estimates.
Microsoft Corporation (NASDAQ:MSFT) provides AI-powered cloud, productivity, and business solutions, focusing on efficiency, security, and AI advancements.
8. Autodesk, Inc. (NASDAQ:ADSK)
Number of Hedge Fund Holders: 83
Upside: 47.18%
Autodesk, Inc. (NASDAQ:ADSK) is one of the Best Software Stocks to Buy According to Wall Street Analysts. On January 22, Reuters reported that Autodesk, Inc. (NASDAQ:ADSK) will cut 7% of its global workforce, which translates to around 1,000 jobs, to increase its spending on cloud and AI platforms. Following the announcement, the share price moved up by roughly 3%.
That said, Wall Street is bullish on the stock, with analysts’ 12-month price target suggesting more than 47% upside. Recently, on January 21, Siti Panigrahi from Mizuho Securities reiterated a Buy rating on the stock without disclosing any price target. Earlier, on January 13, Piper Sandler also reiterated an Overweight rating on Autodesk, Inc. (NASDAQ:ADSK) with a $373 price target.
Analysts at Piper Sandler noted the company to be one of its top picks for 2026, mainly due to its progress in the generative AI solutions for various industries. The firm noted that Autodesk has made significant progress over the past few years in successfully monetizing changes in the industry.
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. Datadog, Inc. (NASDAQ:DDOG)
Number of Hedge Fund Holders: 72
Upside: 55.07%
Datadog, Inc. (NASDAQ:DDOG) is one of the Best Software Stocks to Buy According to Wall Street Analysts. Recently, on January 30, Blair Abernethy from Rosenblatt Securities reiterated a Buy rating on the stock and lowered the price target from $200 to $180. Earlier, on January 29, Keith Bachman from BMO Capital also reiterated a Buy rating on Datadog, Inc. (NASDAQ:DDOG) but lowered the price target from $215 to $170.
The ratings come ahead of the company’s Q4 2025 earnings, expected to be released on February 10. Analysts at Rosenblatt Securities noted that they expect the company to post Q4 results largely in line or slightly above the Street’s expectations. The firm reduced the price target mainly to incorporate the macro headwinds that are impacting the enterprise software segment.
On the other hand, analysts at BMO Capital noted that the reduced price target is mainly due to the concerns that OpenAI might migrate its workloads away from Datadog, Inc. (NASDAQ:DDOG)’s platform. The firm noted that the timing and scale of the migration remain uncertain, and BMO maintained a Buy rating. The reduced price target reflects broader software sector valuation pressures.
Datadog, Inc. (NASDAQ:DDOG) is a software company that provides an observability solution built for cloud-scale applications, monitoring servers, databases, tools, and services via its SaaS-based data analytics platform.
6. Salesforce, Inc. (NYSE:CRM)
Number of Hedge Fund Holders: 119
Upside: 58.52%
Salesforce, Inc. (NYSE:CRM) is one of the Best Software Stocks to Buy According to Wall Street Analysts. Wall Street is also bullish on Salesforce, Inc. (NYSE:CRM). Recently, on January 26, Kirk Materne from Evercore ISI reiterated a Buy rating on the stock with a $340 price target. Earlier, on January 20, Brad Zelnick from Deutsche Bank also reiterated a Buy rating on the stock but lowered the price target from $360 to $325.
That said, on January 26, Salesforce, Inc. (NYSE:CRM) announced receiving a $5.6 billion, 10-year contract with the US Army. Management noted that the contract is an Indefinite Delivery Indefinite Quantity deal, which means that the Army can order services as needed over the decade without fixed quantities upfront. The contract comes from the company’s subsidiary, Computable Insights LLC. Management highlighted that this is a significant step as it positions Salesforce’s defense efficiency, using its secure cloud, data integration, and AI tools to unify siloed systems.
Salesforce, Inc. (NYSE:CRM) is a cloud-based CRM company that has gained popularity after it unveiled its AI-powered platform called Agentforce.
5. Workday, Inc. (NASDAQ:WDAY)
Number of Hedge Fund Holders: 64
Upside: 58.61%
Workday, Inc. (NASDAQ:WDAY) is one of the Best Software Stocks to Buy According to Wall Street Analysts. On January 20, Mark Moerdler from Bernstein reiterated a Buy rating on the stock with a $298 price target. Earlier on January 12, Goldman Sachs downgraded Workday, Inc. (NASDAQ:WDAY) from Buy to Neutral rating and lowered the price target from $280 to $238.
Analysts at Goldman Sachs noted that the downgrade is mainly due to two main concerns facing the company. The firm highlighted that the company’s human capital management is much smaller and more crowded with CRM and enterprise resource planning, which limits growth potential for the company. Secondly, Goldman Sachs believes that the company’s AI strategy has taken longer than expected to crystallize. The firm believes that 2026 will be a pivotal year for Workday with integrations like Sana restacking its technology.
Despite the concerns, the firm sees upside for Workday, Inc. (NASDAQ:WDAY) in 2026, driven by its efforts to improve its AI positioning in the market. The firm expects that these efforts will stabilize growth and improve revenue growth beyond the 13% to 14% mark.
Workday, Inc. (NASDAQ:WDAY) is a technology company that provides cloud-based software (SaaS) for businesses to manage their finance and human resources functions, including financial management, human capital management (HCM), planning, and payroll.
4. Intuit Inc. (NASDAQ:INTU)
Number of Hedge Fund Holders: 96
Upside: 63.02%
Intuit Inc. (NASDAQ:INTU) is one of the Best Software Stocks to Buy According to Wall Street Analysts. On January 28, Biraj Borkhataria from RBC Capital reiterated a Buy rating on the stock with a $850 price target. Earlier, on January 21, Keith Weiss from Morgan Stanley reiterated a Buy rating on Intuit Inc. (NASDAQ:INTU) with a $880 price target.
Analysts from RBC Capital noted that the company faces risks related to AI, where its customers can turn to free AI tools instead of paying for TurboTax or expert help. However, the firm highlights that less than 15% of the paid users are vulnerable to this shift. Moreover, the firm also believes that the opportunities from AI outweigh threats. RBC highlighted that AI has the potential to drive customer upgrades and grow the addressable market for Intuit Inc. (NASDAQ:INTU). Moreover, the firm also likes the partnerships Intuit has built with OpenAI and Anthropic.
That said, analysts from Morgan Stanley noted that they are bullish on the stock due to the untapped growth potential in key product areas and its cheap valuation. The firm projects 20% annual revenue growth by FY30 and raised revenue expectations from $19 billion in FY25 to $43 billion.
Intuit Inc. (NASDAQ:INTU) provides financial management, payments & capital, compliance, and marketing products and services in the US. The company operates in four segments: Global Business Solutions, Consumer, Credit Karma, and ProTax.
3. SAP SE (NYSE:SAP)
Number of Hedge Fund Holders: 34
Upside: 72.45%
SAP SE (NYSE:SAP) is one of the Best Software Stocks to Buy According to Wall Street Analysts. On January 30, Citizens downgraded SAP SE (NYSE:SAP) from Market Outperform to Market Perform without disclosing any price targets. On the same day, BMO Capital reiterated a Buy rating on the stock but lowered the price target from $320 to $245.
The ratings follow the company’s fiscal Q4 2025 earnings released on January 29. The company grew its quarterly revenue by 18.46% year-over-year to $11.59 billion, but fell short of the consensus by $66.21 million. However, the EPS of $1.93 topped the consensus by $0.21.
Analysts at BMO Capital Markets noted that they lowered the price target due to the company’s failure to meet guidance for cloud computing business growth. The firm highlighted that during their meeting with the management, SAP SE (NYSE:SAP) had expressed confidence in meeting or exceeding the targets. As a result of the miss, the firm has lowered fiscal 2026 cloud growth estimates from 26% to 24% year-over-year growth.
SAP SE (NYSE:SAP) is a leader in ERP software that leverages artificial intelligence to enhance its enterprise resource planning (ERP) solutions.
2. Oracle Corporation (NYSE:ORCL)
Number of Hedge Fund Holders: 122
Upside: 73.29%
Oracle Corporation (NYSE:ORCL) is one of the Best Software Stocks to Buy According to Wall Street Analysts. On January 29, Oracle Corporation (NYSE:ORCL) launched its latest AI platform for life sciences companies. The platform helps companies to streamline drug development and research.
Management noted that the platform tackles data fragmentation by integrating vast datasets and applying generative AI for faster insights. The tool targets pharmaceutical firms, medical device makers, researchers, and life sciences organizations as it helps these companies accelerate the R&D process and speed up clinical trials.
That said, earlier on January 27, Keith Weiss from Morgan Stanley reiterated a Hold rating on the stock and lowered the price target from $320 to $213. The firm highlighted in a research note that the market is underestimating the amount of investment required by Oracle Corporation (NYSE:ORCL) to fulfill its backlog. The firm noted that the company has grown its order backlog by $426 billion over the past 4 quarters, which takes the total backlog to $523 billion. The firm noted that this is a positive step as it provides visibility of the company’s further growth. However, the backlog also reflects the huge investment the company needs to fulfill the backlog, due to the capital-intensive nature of AI compute infrastructure.
Oracle Corporation (NYSE:ORCL) is a global technology company specializing in database software, cloud solutions, and enterprise software products. It provides businesses with tools for data management, analytics, and digital transformation.
1. ServiceNow, Inc. (NYSE:NOW)
Number of Hedge Fund Holders: 104
Upside: 74.64%
ServiceNow, Inc. (NYSE:NOW) is one of the Best Software Stocks to Buy According to Wall Street Analysts. On January 30, Peter Weed from Bernstein reiterated a Buy rating on the stock with a $219 price target. On the same day, RBC Capital lowered the price target on ServiceNow, Inc. (NYSE:NOW) from $195 to $185, but maintained an Outperform rating on the stock.
The ratings follow the company’s fiscal Q4 2025 earnings release, announced on January 28. The company grew its revenue by 20.66% year-over-year to $3.57 billion, ahead of expectations by $38.91 million. Moreover, the EPS of $0.92 also topped consensus by $0.03. Management noted that the company exceeded guidance across all topline growth and profitability metrics. The growth was attributed to an increase in licensed users, workflows, and transactions on its platform.
Analysts at RBC Capital noted that ServiceNow, Inc. (NYSE:NOW) achieved a “clean beat” on earnings, surpassing guidance with metrics like 20% organic constant currency current remaining performance obligation growth. Moreover, the company also issued a 2026 organic outlook that exceeds consensus estimates, projecting about 18.75% subscription revenue growth at the midpoint.
ServiceNow, Inc. (NYSE:NOW) provides a platform that integrates workflows, data, and AI to coordinate how work flows across large organizations.
While we acknowledge the potential of NOW 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 NOW and that has 100x upside potential, check out our report about this cheapest AI stock.
READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.
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 address below.
