In this piece we will look at the 5 Best Software Stocks to Buy in 2026. Please visit 10 Best Software Stocks to Buy in 2026 if you’d like to see an extended list and how we came up with the list of Best Software Stocks to Buy in 2026.
5. Salesforce, Inc. (NYSE:CRM)
Number of Hedge Fund Holders: 101
Salesforce, Inc. (NYSE:CRM) is among our Best Software Stocks to Buy in 2026. Recently, on July 1, John DiFucci from Guggenheim upgraded Salesforce, Inc. (NYSE:CRM) from Neutral to Buy, while maintaining a price target of $228.
The rating upgrade comes after the stock has fallen more than 35% over the past 6 months. The sell-off has been driven by fears that AI can disrupt software businesses. The analyst noted that the sell-off and the AI fear have gone too far. He acknowledged that the company faces some risks from AI advancements but noted that the current valuation has already priced in an overly harsh downside. The analyst noted that AI can pressure Salesforce, but will not kill it.
Overall, the Street has a bullish outlook on the stock as 73% of the 55 analysts covering the stock maintain a Buy rating. The Street’s high price target suggests more than 140% upside, while the average price target reflects more than 44% upside from the current level.
Salesforce Inc. (NYSE:CRM) is a global enterprise software company that provides customer relationship management (CRM) and cloud-based business applications across sales, service, marketing, commerce, and data analytics. Its Customer 360 platform, powered by data tools and trusted AI, enables organizations to unify customer data and drive personalized engagement.
4. ServiceNow, Inc. (NYSE:NOW)
Number of Hedge Fund Holders: 108
ServiceNow, Inc. (NYSE:NOW) is one of our Best Software Stocks to Buy in 2026. The company is set to release its fiscal Q2 2026 earnings on July 22. The stock recently rebounded around 18% after a selloff of roughly 27% over the past 6-months.
Management expects fiscal Q2 2026 subscription revenue to grow by 22.5% year-over-year to be in the range of $3.815 billion – $3.820 billion. Wall Street is also bullish on the stock ahead of the earnings, with analysts’ 12-month average price target suggesting more than 26% upside.
Recently, on July 2, Guggenheim upgraded ServiceNow, Inc. (NYSE:NOW) to Buy from Neutral, setting a $125 price target. The firm noted the stock to be an attractive buying opportunity considering the current valuations. Guggenheim calls ServiceNow a comfortably profitable company, which is expected to keep growing organically at double-digit rates for the foreseeable future.
The firm believes investors can access this durable, profitable growth at a price that doesn’t fully reflect it.
ServiceNow Inc. (NYSE:NOW) provides cloud-based and AI-embedded end-to-end workflow automation solutions for enterprises. The company is located in Santa Clara, California and was founded in June 2004 by Frederic B. Luddy.
3. Oracle Corporation (NYSE:ORCL)
Number of Hedge Fund Holders: 115
Oracle Corporation (NYSE:ORCL) is one of the Best Software Stocks to Buy in 2026. Despite a 40% decline in share price over the past 6-months, analysts see more than 73% upside over the next 12-months.
Recently, on June 30, Freedom Broker lowered the price target on Oracle Corporation (NYSE:ORCL) from $230 to $210 and maintained a Buy rating on the shares. The firm noted that the company’s fiscal Q4 2026 results capped a year in which the company transformed from a traditional enterprise-software player into an aggressive builder of AI compute infrastructure.
The firm highlighted that the quarter reflected solid cloud reacceleration and application momentum. Freedom Broker noted that now the quarterly performance matters less, considering the strong backlog, which gives visibility into the future of a capital program big enough to reshape the company’s balance sheet.
He highlighted that the main question for the company is whether it can fund the massive buildout, convert that backlog into actual revenue and cash, and protect its credit standing along the way. The firm noted that while the execution has been good, it is not good enough for a re-rating.
Oracle Corporation (NYSE:ORCL) provides information technology related products and services to enterprises, through its main business segments: Cloud and License, Hardware, and Services. The company is based in Austin, Texas and was founded on June 1977 by Lawrence Joseph Ellison, Robert Nimrod Miner, and Edward A. Oates.
2. Uber Technologies, Inc. (NYSE:UBER)
Number of Hedge Fund Holders: 153
Uber Technologies, Inc. (NYSE:UBER) is one of the Best Software Stocks to Buy in 2026. Recently, on June 26, analyst Jake Fuller from BTIG maintained a Buy rating on Uber Technologies, Inc. (NYSE:UBER) with a price target of $100.
The analyst noted that while the near-term autonomous vehicle catalysts remain limited, as Waymo is dominating the US AV landscape. However, the analyst does not see this as a major challenge for Uber. Jake noted that the market is over-discounting the company’s US rideshare business to an extent where it almost assigns no value to it, once delivery and international rideshare are valued at reasonable EBITDA multiples separately.
Jake expects the AV ecosystem to become more fragmented over time, with multiple platforms coexisting rather than one winner-take-all player. In that scenario, he sees Uber positioned as a key demand aggregator, even if that future is still years away. Overall, the Street remains bullish on the stock, with analysts’ 12-month price target suggesting more than 43% upside from the current level.
Uber Technologies Inc. (NYSE:UBER) is a global transportation technology company that focuses on ride-hailing, courier services, food delivery, and freight transport.
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 282
Microsoft Corporation (NASDAQ:MSFT) is one of the Best Software Stocks to Buy in 2026. Recently, on July 2, Reuters reported that Microsoft Corporation (NASDAQ:MSFT) is launching a new company called Microsoft Frontier, with the aim of helping businesses choose and integrate AI technologies that actually fit their needs and generate real returns.
As per the report, the venture starts with $2.5 billion in funding from Microsoft and will work with clients like Unilever and Novo Nordisk. Notably, customers keep the results of the work rather than sending data back to Microsoft. The report noted that this reflects a broader shift in the market as large companies are moving away from relying on a single AI provider like Anthropic or OpenAI, instead mixing multiple technologies.
With this launch, Microsoft joins a similar playbook to Palantir, which already uses Nvidia’s open-source models for large clients, and Amazon Web Services, which recently launched its own $1 billion embedded-engineer unit. Reuters noted that an analyst noted that large businesses worry that leaning too heavily on frontier labs like Anthropic or OpenAI could eventually let those labs develop competing expertise, particularly in fields like coding and law.
Microsoft Corporation (NASDAQ:MSFT) is a global technology company that develops and sells a wide range of software, cloud services, devices, and business solutions, serving both individual users and enterprise customers worldwide. Its flagship products include Windows, Microsoft 365, Azure, LinkedIn, and Xbox.
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 the cheapest AI stock.
READ NEXT: 10 Good Stocks to Invest in Now and 10 Most Undervalued US Stocks According to Hedge Funds.
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