9 Best Software Infrastructure Stocks to Buy Now

In this article, we will take a look at the best software infrastructure stocks to buy now.

The software market has long been the foundation of the modern-day digital economy, but investors are now paying closer attention than ever. As enterprises adopt cloud computing and enable cybersecurity, data analytics, and AI-powered applications, software infrastructure companies have begun to sit at the center of one of today’s strongest tech trends.

Despite the dominance of big players, a growing number of smaller companies are also gaining traction. In its April 28 article “AI disruption puts focus on long-term value of US equities, Goldman Sachs says,” Reuters outlined that the possible AI disruption has fueled concerns that U.S. equity valuations are heavily dependent on long-term growth projections, particularly in the software space.

According to the publication, these worries have been mounting since Anthropic announced tools that automate tasks, raising questions about how they would affect conventional software providers. Amid these fears, the S&P 500 software and services (SPLRCIS) ​index has declined nearly 17% so far in 2026, the article outlined.

Alongside this, tech giants have allocated billions of ​dollars to AI capex over three years as part of their intensive push for market leadership. Yet, investor worries over short-term returns still linger, the author concluded.

Keeping this in mind, we have compiled a list of the best software infrastructure stocks to buy now.

Our Methodology

For this article, we began by filtering for stocks in the Software Infrastructure industry with market capitalizations exceeding $2 billion. Next, we shortlisted stocks with at least 20% upside potential, and based on the number of hedge funds holding positions in these stocks. We limited our final selection to companies that have recently reported noteworthy developments likely to impact investor sentiment. These stocks were then ranked in ascending order by the number of hedge fund holdings.

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 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).

9. Zeta Global Holdings Corp. (NYSE:ZETA)

Number of Hedge Fund Holders: 47

On May 1, B. Riley raised the price target on Zeta Global Holdings Corp. (NYSE:ZETA) to $30 from $28 and reiterated a Buy rating. According to the firm, the company’s Q1 results were robust, with broad-based strength across both new and existing customers. This signals growing super-scaled customer expansion and early traction with Athena, the firm added.

On the same day, Needham maintained a Buy rating and a price target of $25 on Zeta Global Holdings Corp. (NYSE:ZETA) after the Q1 earnings report. The company delivered organic revenue growth of 29% in the quarter, slightly above the 28% achieved in the fourth quarter. What contributed the most to the revenue beat was the outperformance of the Marigold acquisition.

As stated by CEO David A. Steinberg during the earnings call,

“Our 19th consecutive beat and raise quarter underscores our commitment to delivering value through innovation and strategic execution. Athena’s launch has been transformative, positioning us as a leader in AI-driven marketing solutions.”

Looking ahead, Zeta Global Holdings Corp. (NYSE:ZETA) is optimistic about EPS and revenue growth in the coming quarters, making the stock one of the best software infrastructure stocks to buy now. The performance will be driven mainly by sustained momentum in AI initiatives, as management stated.

Zeta Global Holdings Corp. (ZETA) is a New York-based operator of an omnichannel data-driven cloud platform. Founded in 2007, the company provides enterprises with consumer intelligence and marketing automation software.

8. Rubrik, Inc. (NYSE:RBRK)

Number of Hedge Fund Holders: 56

On May 1, Patrick O’Neill, an analyst at Wolfe Research, started coverage on Rubrik, Inc. (NYSE:RBRK) with an Outperform rating and a price target of $70. As the analyst told investors, the company finds itself “at the intersection of data and security, two of the most important categories of software with the rise of AI today.”

With that said, the firm remains optimistic about the company’s potential to sustain 30%-plus Subscription ARR growth in 2026 and durable high-20% growth in the subsequent years. While expressing confidence in Rubrik, Inc. (NYSE:RBRK), O’Neill said,

“Rubrik clearly belongs in the AI winners category (alongside names like DDOG, SNOW, CRWD, NET, and others) and carry the premium valuation that comes with it.”

This view is reinforced by Jefferies, which said Rubrik, Inc. (NYSE:RBRK) is in a solid position for sustainable growth as a cyber resilience leader. The firm believes that the company’s over-20 % subscription ARR growth in the years ahead will be driven by cross-selling SaaS/cloud data protection, strong cyber resilience capabilities, and efficient data/AI governance. The firm initiated coverage on the company with a Buy rating and a price target of $65.

Rubrik, Inc. (NYSE:RBRK) is a California-based provider of data security solutions. Incorporated in 2013, the company offers data protection, data threat analytics, data security posture, and cyber recovery solutions, among others.

7. Zscaler, Inc. (NASDAQ:ZS)

Number of Hedge Fund Holders: 56

On May 1, Citizens trimmed the price target on Zscaler, Inc. (NASDAQ:ZS) to $210 from $290 and reiterated an Outperform rating, as reported by TheFly. A rise in concerns about frontier AI-powered cyber risks has led to a sharp re-rating of cybersecurity valuations ahead of Q1 earnings, the firm said, adding that this comes despite strong demand for zero-trust and SASE solutions. This signals potential risks in model behavior and revised industry data highlighting current security needs.

Back on April 22, Morgan Stanley also cut the price target on Zscaler, Inc. (NASDAQ:ZS) to $155 from $200, while downgrading the stock from Overweight to Equalweight. Just last year, the firm upgraded the company in anticipation of platform expansion, positioning it to emerge as a third key platform vendor through the Red Canary acquisition, data security, and digital experience.

However, Morgan Stanley hasn’t yet seen strong traction with Red Canary comparable to ZDX bookings, with its 80% YoY surge to $100 million ARR. Although risks like increased competition exist, Zscaler, Inc. (NASDAQ:ZS)’s 53.78% upside potential and support from the majority of analysts make it one of the best software infrastructure stocks to buy now.

Zscaler, Inc. (NASDAQ:ZS) is a California-based cloud security company that offers cyberthreat protection, security operations, and data security products. Founded in 2007, the company serves a diverse range of markets, including automotive, energy, financial services, and healthcare.

6. GoDaddy Inc. (NYSE:GDDY)

Number of Hedge Fund Holders: 57

On May 1, Alec Brondolo from Wells Fargo lifted the price target on GoDaddy Inc. (NYSE:GDDY) to $83 from $77 and reiterated an Equal Weight rating. In its analysis, the firm highlighted the company’s Q1 EPS. Although the booking outlook is encouraging, intensifying competition signals further volatility in the times ahead, the firm noted.

On the same day, several other analysts revisited their take on GoDaddy Inc. (NYSE:GDDY). Raymond James maintained a Strong Buy rating and a price target of $100 on the company. The firm believes AI is an emerging opportunity for the company. On the other hand, Alexei Gogolev, an analyst at JPMorgan, cut the company’s price target from $167 to $154 and reiterated an Overweight rating.

When GoDaddy Inc. (NYSE:GDDY) announced its Q1 FY26 earnings report a day earlier, it reported EPS above consensus estimates and revenue in line with forecasts. What stood out the most was the company’s 6% YoY revenue surge to $1.3 billion, which was towards the high end of its projection. With a focus on operational efficiency and strategic growth, the company stands among the best software infrastructure stocks to buy now.

GoDaddy Inc. (NYSE:GDDY) is an Arizona-based developer of cloud-based products. Founded in 1997, the company operates through two segments: Applications and Commerce, and Core Platform. The company’s core offerings include application products, website building, and marketing tools and services.

5. Toast, Inc. (NYSE:TOST)

Number of Hedge Fund Holders: 68

On April 22, TheFly reported that BMO Capital started coverage on Toast, Inc. (NYSE:TOST) with an Outperform rating and a price target of $35. In a research note, the analyst says the recent market pullback calls for an emphasis on category leaders with solid moats that are resilient to AI disruption and intensifying competition.

Given this landscape, Toast, Inc. (NYSE:TOST) differentiates itself through unique growth catalysts that underpin its long-term growth momentum, the firm added. As stated by it:

“Under this framework, we believe TOST stands out, supported by idiosyncratic growth drivers that have yet to fully materialize.”

The company’s financial standing reinforces the firm’s view. With an impressive quarterly earnings growth (YoY) of 215.60% and an ROE (ttm) of 18.64%, Toast, Inc. (NYSE:TOST) is considered one of the best software infrastructure stocks to buy now. Out of the 32 analysts covering the stock, 66% have a bullish take, and the remaining 34% are neutral.

Toast, Inc. (NYSE:TOST) is a Massachusetts-based operator of a cloud-based digital technology platform. Incorporated in 2011, the company offers a range of products and services, including SaaS for restaurant operations, conversational AI, online ordering, and vendor management.

4. Core Scientific, Inc. (NASDAQ:CORZ)

Number of Hedge Fund Holders: 76

On April 28, TheFly reported that Keefe Bruyette lifted the price target on Core Scientific, Inc. (NASDAQ:CORZ) to $28, up from $25, and reiterated an Outperform rating. Slightly above the one-year median price target of $27, the firm’s target reflects an upside potential of approximately 38% from the current level.

A day earlier, Core Scientific, Inc. (NASDAQ:CORZ) announced the expansion of its Pecos, Texas campus to nearly 1.5 gigawatts of gross power capacity, which is roughly 1.0 GW of leasable power. This is being done to transform its Pecos facility into a data center facility for AI infrastructure. With initial capacity planned for early next year, the interior foundational footings for the first data hall have already been finished.

As stated by CEO Adam Sullivan,

“By expanding in a market where we already control power, infrastructure, and operations, we can execute with speed to meet market demand.”

Overall, Core Scientific, Inc. (NASDAQ:CORZ) has consistently outperformed the benchmark. If we consider the YTD comparative return, the company delivered 39.77% versus the S&P 500’s 5.62%. This alone speaks volumes about the company’s operational momentum, making it one of the best software infrastructure stocks to invest in.

Core Scientific, Inc. (NASDAQ:CORZ) is a Delaware-based provider of infrastructure for high-density colocation services and digital asset mining. Founded in 2017, the company operates through Colocation, Digital Asset Self-Mining, and Digital Asset Hosted Mining segments.

3. Palantir Technologies Inc. (NASDAQ:PLTR)

Number of Hedge Fund Holders: 89

On May 2, Stephen Bersey, an analyst at HSBC, downgraded Palantir Technologies Inc. (NASDAQ:PLTR) to Hold from Buy and trimmed the price target to $151 from $205. As said by the analyst, the company was the first one to develop a forward-deployed engineer model by embedding engineers within customer organizations. However, this has led peers like OpenAI to adopt similar approaches.

Bersey believes the rise of agentic frameworks and model-context protocol servers has begun to weaken the company’s long-standing competitive moat. With Anthropic’s boosted revenue, HSBC thinks some of it may be coming at the expense of Palantir Technologies Inc. (NASDAQ:PLTR).

Recently, several other analysts have presented their narratives. RBC Capital views the company’s valuation as unattractive and its risk/reward profile as skewed downward. The firm maintained an Underperform rating and a price target of $90 on Palantir Technologies Inc. (NASDAQ:PLTR) on April 29.

On the other hand, Wedbush is positive about the company’s Artificial Intelligence Platform, noting that its technology is gaining attention through word of mouth among its current customer base. The firm maintained an Outperform rating and a price target of $230 on the company on April 29. With a Buy rating from more than half of the analysts covering the stock, the company remains one of the best software infrastructure stocks to buy now.

Palantir Technologies Inc. (NASDAQ:PLTR), incorporated in 2003, is a Florida-based software platform provider for the intelligence community, supporting counterterrorism investigations and operations.

2. Oracle Corporation (NYSE:ORCL)

Number of Hedge Fund Holders: 111

On April 28, Wedbush reaffirmed an Outperform rating on Oracle Corporation (NYSE:ORCL) with a price target of $225. While disagreeing with the idea that growth is slowing, the firm said that OpenAI is experiencing very strong demand across both consumer and enterprise ends.

Wedbush further stated that it will continue to acquire AI-powered technology stocks, particularly Oracle Corporation (NYSE:ORCL), viewing the recent worries about OpenAI as exaggerated. The company has adequate capital to meet its compute capacity needs for at least the next three years, the firm asserted, adding that this supports the company’s backlog fulfillment in the near term.

With a bullish stance from the majority of analysts covering the stock and strong fundamentals, Oracle Corporation (NYSE:ORCL) is among the best software infrastructure stocks to invest in. The company has an impressive ROE (ttm) of 57.57%, a quarterly revenue growth (YoY) of 21.70%, and a one-year return of nearly 15%.

Oracle Corporation (NYSE:ORCL) is a Texas-based company that provides solutions for enterprise information technology environments. Incorporated in 1977, the company offers Oracle Cloud SaaS, Oracle Health applications, Oracle Cloud and on-premises licenses, and Oracle license support services.

1. Microsoft Corporation (NASDAQ:MSFT)

Number of Hedge Fund Holders: 312

On May 1, TheFly reported that Patrick Colville from Scotiabank trimmed the price target on Microsoft Corporation (NASDAQ:MSFT) from $600 to $550 and reiterated an Outperform rating. While noting the strong third-quarter results, the analyst said that “full speed ahead” Q4 guidance and “all systems go” for FY27 targets stood out the most.

According to Colville, investors appear concerned about Azure’s growth momentum, Copilot adoption, OpenAI’s competitive standing, and potential increases in capex. The recent earnings helped lift these worries, driven by anticipated Azure re-acceleration through the year, greater M365 Copilot seat adoption, access to OpenAI technology at zero incremental cost, and updated capex targets, the analyst concluded.

On the other hand, BMO Capital lifted the price target on Microsoft Corporation (NASDAQ:MSFT) to $515 from $505 and reaffirmed an Outperform rating on April 30. The firm believes that the company is a strong defensive stock in a troubled software landscape. Thus, it remains one of the best software infrastructure stocks to buy now.

As stated by the analyst,

“MSFT reported a solid set of results, with Azure growth that was 1 point above consensus, and a June quarter Azure revenue guide of 39-40% y/y that was ahead of expectations.”

Microsoft Corporation (NASDAQ:MSFT) is a Washington-based company operating through Productivity and Business Processes, Intelligent Cloud, and Personal Computing segments. Founded in 1975, the company provides software, services, devices, and solutions worldwide.

Disclosure: None. Follow Insider Monkey on Google News.