In this article, we will list the 5 Most Profitable Software Stocks to Buy Right Now. Please visit 10 Most Profitable Software Stocks to Buy Right Now if you would like to see the extended list and the methodology behind it.
5. Fortinet, Inc. (NASDAQ:FTNT)
Net Income (TTM): $1.95 billion
Number of Hedge Fund holdings: 52
On June 8, BofA lifted the price target on Fortinet, Inc. (NASDAQ:FTNT) to $180, up from $130. This followed the firm’s Global Technology Conference, where it hosted the company’s management. The analyst stated that demand remains strong, with no signs of pull-forward activity, and added that SASE and related markets are poised to become the next major growth drivers. The firm has a Buy rating on the stock.
Shaul Eyal from TD Cowen also raised the price target on Fortinet, Inc. (NASDAQ:FTNT) to $160 from $125 on the same day, while reaffirming a Buy rating. As noted by the analyst, the company has a solid presence in its core markets, with AI providing the “next growth layer.” The ongoing investments in data center buildouts offer a “healthy backdrop” for even more core firewall spending, the firm noted.
Photo by Hack Capital on Unsplash
TD Cowen projects the current firewall market growth rate to surge from 5% to between 8% and 12%. This creates a favorable backdrop for Fortinet, Inc. (NASDAQ:FTNT), which secures its spot among market leaders with a market share of more than 20%, the firm asserted.
Fortinet, Inc. (NASDAQ:FTNT) is a California-based provider of cybersecurity and various networking and security solutions. Founded in 2000, the company offers its products to enterprises, communication service operators, and government institutions.
4. Palantir Technologies Inc. (NASDAQ:PLTR)
Net Income (TTM): $2.28 billion
Number of Hedge Fund holdings: 96
On June 24, Wedbush reiterated an Outperform rating and a price target of $230 on Palantir Technologies Inc. (NASDAQ:PLTR). In its analysis, the firm highlighted the company’s partnership with Zeta, which is focused on marketing infrastructure within the AI landscape. The collaboration will utilize Zeta’s AI-driven marketing cloud to help companies expand and retain their customer base.
According to Wedbush, Palantir Technologies Inc. (NASDAQ:PLTR) is a key player in enterprise AI development. The firm believes the technology and value provided by the company reveal capabilities that many have yet to fully understand.
Despite its negative one-year return, Palantir Technologies Inc. (NASDAQ:PLTR)’s growth metrics are exceptionally strong. The company has a solid profit margin of 43.67%, making it one of the most profitable software stocks to invest in. What’s even more impressive is the company’s quarterly earnings growth (yoy) of 306.70% and quarterly revenue growth (yoy) of 84.70%.
Palantir Technologies Inc. (NASDAQ:PLTR), incorporated in 2003, is a Florida-based software platform provider for the intelligence community, supporting counterterrorism investigations and operations.
3. Adobe Inc. (NASDAQ:ADBE)
Net Income (TTM): $7.23 billion
Number of Hedge Fund holdings: 86
On June 29, Phillip Securities trimmed the price target on Adobe Inc. (NASDAQ:ADBE) to $203 from $385, while downgrading the stock to Neutral from Buy. Although legacy software-as-a-service “remains resilient due to its mission-critical nature and reliability,” the firm said company growth has lagged even with an early advantage in AI.
Phillip Securities noted that while AI adoption is advancing, its contribution to overall revenue will likely remain minimal in the years ahead. This contrasts with competitors that are already experiencing significant AI-powered monetization, the firm added. With that said, the firm expects only a modest upside in the near-term valuation outlook for the application software market.
Three days earlier, Piper Sandler reaffirmed a Neutral on Adobe Inc. (NASDAQ:ADBE) with a price target of $240. This followed the company’s announcement that it had acquired Topaz Labs, a provider of AI models for video and image enhancement. While describing the company’s competitive environment as increasingly fierce, the firm said that M&A is the right strategy for the company in the AI and agentic era. With a profit margin of 28.69%, ADBE remains one of the most profitable software stocks to buy right now.
Adobe Inc. (NASDAQ:ADBE) is a California-based technology company operating through Digital Media, Digital Experience, and Publishing and Advertising segments.
2. Oracle Corporation (NYSE:ORCL)
Net Income (TTM): $16.98 billion
Number of Hedge Fund holdings: 115
On June 24, Evercore ISI reaffirmed an Outperform rating on Oracle Corporation (NYSE:ORCL) with a price target of $245. This follows the company’s Form 10-K filing for FY26, which the firm believes provides greater revenue visibility.
A day earlier, KeyBanc maintained an Overweight rating and a price target of $300 on Oracle Corporation (NYSE:ORCL). The firm’s optimism is driven by the company’s strengthened expense outlook. After Q4 results, the firm also raised its EPS estimates for fiscal years 2028 through 2030, exceeding consensus for both FY29 and FY30.
While noting the company’s participation in AI hyperscaler infrastructure, KeyBanc said that it represents a meaningful cost of goods expense. The moderation in operating expense growth is sufficient to offset gross margin challenges, the firm added.
With an impressive operating margin (ttm) and ROE (ttm) of 36.20% and 53.38%, respectively, Oracle Corporation (NYSE:ORCL) is among the most profitable software stocks to buy right now. This is reinforced by the stock’s 1-year consensus upside potential of 66.06%.
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 license and on-premise license, and Oracle license support services.
1. Microsoft Corporation (NASDAQ:MSFT)
Net Income (TTM): $125.22 billion
Number of Hedge Fund holdings: 282
As of June 30, Microsoft Corporation (NASDAQ:MSFT) stock has declined by approximately 19% in June. As highlighted by The Business Times on June 29, the company’s shares are entering their worst month since the dot-com era. This is due to investors’ concerns about the company’s position in the AI-driven landscape.
“Microsoft is getting hit on two sides with worries about both AI spending and AI disruption,” stated Jack Ablin, the Chief Investment Strategist at Cresset Wealth Advisors. “While it looks like a pretty good deal with the valuation so low, I’m getting the sense that investors are shooting first and asking questions later.”
What’s even more alarming is the company’s capex projections, as Microsoft Corporation (NASDAQ:MSFT) forecasts US$190 billion in capex through the end of December. This is higher than the Street’s estimates. The company’s strong profit margin of 39.34% positions it as one of the most profitable software stocks to buy right now.
Earlier, on June 25, Stifel trimmed the company’s price target to $400, noting that Street FY27 gross margin estimates are on the high end. The firm noted the company’s mid-to-upper single-digit guidance for operating expense growth “given ongoing R&D investments.”
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.
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: Starter Stock Portfolio: 14 Safe Stocks to Buy Now and 40 Most Popular Stocks Among Hedge Funds Heading Into 2026.
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