In this article, we will look at the 8 Best AI Software Stocks to Buy According to Hedge Funds.
On June 17, Mohamed El-Erian, Chief Economic Advisor at Allianz, appeared on CNBC’s ‘Closing Bell’ to talk about the latest comments from the Federal Reserve.
He was of the view that this is a very different Fed, and the risk right now that is happening in markets and some of the commentary, according to him, is that people are applying the old playbook to a new Fed without understanding that this Fed is pivoting. All the focus right now is on the SEP, and the SEP is of dubious content and would become even more dubious going forward. He added that we heard today that this is a Fed chair who is very serious about reforming the institution so it can deliver better policies, and we have the five areas he is going to be focusing on.
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El-Erian further stated that he believes the market’s reaction to what happened today is negative, and it has taken it too hawkish. He thinks they are just reacting to the SEP and expected to hear something they would have heard during the Powell tenure. They are not going to get that, as this is a very different Fed chair who communicates very differently and does not believe in forward guidance.
With these broader market trends in view, let’s look at the best AI software stocks to buy according to hedge funds.
Our Methodology
We used stock screeners and online sources to identify the best AI software stocks and then selected the top 8 stocks most popular among hedge funds as of Q1 2026, using the hedge fund sentiment data from Insider Monkey’s database. The stocks are arranged in ascending order of hedge fund sentiment.
Note: All data was recorded on June 17.
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. Insider Monkey’s quarterly newsletter strategy selects 14 small-cap and large-cap stocks every quarter and has returned 599.2% since May 2014, beating its benchmark by 372 percentage points (see more details here).
8 Best AI Software Stocks to Buy According to Hedge Funds
8. UiPath Inc. (NYSE:PATH)
Number of Hedge Fund Holders: 40
UiPath Inc. (NYSE:PATH) is one of the best AI software stocks to buy according to hedge funds. UiPath Inc. (NYSE:PATH) announced on June 16, Maestro Case, which is a new AI-native UiPath agentic case management capability available as part of the UiPath Maestro™ business orchestration capabilities. It further stated that Maestro Case “extends governed orchestration and automation to complex and exception-laden case management”, which allows enterprises to manage dynamic, long-running cases with increased control, visibility, and execution speed.
In a separate development, BMO Capital cut the price target on UiPath Inc. to $13 from $14 on June 1 and maintained a Market Perform rating on the shares. The firm told investors in a research note that UiPath Inc. delivered a good start to FY27 with revenue upside. However, Net New Annual Recurring Revenue was modestly below consensus on a constant currency basis. BMO believes that the larger AI-driven deals and strength in enterprise cohorts will drive net new ARR growth.
UiPath Inc. is involved in the development and provision of a software platform to automate business processes. The company serves the healthcare, public, finance, telecommunication, and banking industries, and also offers claims processing automation, accounts payable automation, finance and accounting automation, and contact center automation.
7. Snowflake Inc. (NYSE:SNOW)
Number of Hedge Fund Holders: 80
Snowflake Inc. (NYSE:SNOW) is one of the best AI software stocks to buy according to hedge funds. Truist lifted the price target on Snowflake Inc. (NYSE:SNOW) to $300 from $275 on June 4 and reiterated a Buy rating on the shares, telling investors in a research note that following discussions at the Snowflake Summit 2026, customer and partner feedback suggest that the company’s CoCo tools are accelerating workload creation, migrations, and platform expansion. This is driving increased usage, while also bolstering Snowflake Inc.’s role as a governance, connectivity, and orchestration layer for enterprise AI. The firm added that this is also supporting expectations for improved productivity, operating leverage, and long-term AI-driven growth.
Snowflake Inc. also received a rating update from Scotiabank on June 8, with the firm lifting the price target on the stock to $320 from $285 while reiterating an Outperform rating on the shares. It told investors that the firm left the Summit 2026 with confidence that the company is benefiting from enterprise AI adoption.
Snowflake Inc. provides cloud data warehousing software and offers Data Cloud, an ecosystem that allows customers, data providers, partners, and data consumers to break down data silos and derive value from data. The company’s platform supports a range of use cases, including data lakes, data warehousing, data engineering, data application development, data science, and data sharing.
6. Adobe Inc. (NASDAQ:ADBE)
Number of Hedge Fund Holders: 86
Adobe Inc. (NASDAQ:ADBE) is one of the best AI software stocks to buy according to hedge funds. Citi cut the price target on Adobe Inc. (NASDAQ:ADBE) to $228 from $264 on June 12 and reaffirmed a Neutral rating on the shares, telling investors in a research note that the company reported “relatively solid” fiscal Q2 numbers. However, Citi pointed to “more signs of disruption” with an implied $500M cut in its fiscal 2026 organic annual recurring revenue outlook. The firm cut estimates post the earnings print.
Adobe Inc. also received a rating update from Freedom Broker on the same day. The firm downgraded the stock to Hold from Buy, bringing the price target on the shares down to $250 from $510 and telling investors in a research note that the company’s growth quality shifted this quarter, as the acceleration was acquired rather than organic. It believes that the company is now in a “show-me phase” and added that management is deliberately trading near-term subscription revenue for top-of-funnel reach.
Adobe Inc. is a global technology company that provides digital marketing and media solutions. The company’s operations are divided into the following segments: Digital Media, Digital Experience, and Publishing and Advertising.
5. Palantir Technologies Inc. (NASDAQ:PLTR)
Number of Hedge Fund Holders: 96
Palantir Technologies Inc. (NASDAQ:PLTR) is one of the best AI software stocks to buy according to hedge funds. Reuters reported on June 16 that, according to a statement from the French Prime Minister’s office on Tuesday, France’s domestic intelligence agency DGSI will replace tools from Palantir Technologies Inc. (NASDAQ:PLTR) in favour of a French rival, ChapsVision. However, the process is likely to take several years. Prime Minister Sebastien Lecornu also stated in a video post on V that ChapsVision had on Tuesday “been retained by the DGSI … to substitute the American giant Palantir”.
Reuters further reported that despite this, Palantir Technologies Inc. stated that its long-term contract with the DGSI “remains fully in force,” with Lecornu’s office clarifying that the company’s tools would continue to be used until ChapsVision’s could be integrated “to avoid a capability gap”. The contract was renewed at the end of 2025 for several more years. Reuters also reported that ChapsVision did not respond to a request for comment.
Palantir Technologies Inc. builds and deploys software platforms that serve as central operating systems for customers. The company focuses on augmenting human intelligence and developing products for human-driven real-world data analysis.
4. Salesforce, Inc. (NYSE:CRM)
Number of Hedge Fund Holders: 101
Salesforce, Inc. (NYSE:CRM) is one of the best AI software stocks to buy according to hedge funds. Salesforce, Inc. (NYSE:CRM) announced on June 16 an expanded partnership with Databricks, which is a data and AI company, to help organizations securely connect enterprise data with customer relationships, approvals, permissions, and workflows essential to drive trusted outcomes. It further stated that the expanded partnership would aid organizations in connecting enterprise data with the business context required for humans and AI agents to make decisions and execute with confidence.
In a separate development, Salesforce, Inc. announced on June 3 the signing of a definitive agreement to acquire Contentful, which is a leading composable content platform that delivers personalized digital experiences at scale. Management stated that the acquisition would bolster the company’s Headless 360 with a native, enterprise-grade content layer connecting customer data with engaging content experiences across Salesforce, Inc.’s leading applications. It added that by leveraging Data 360, Agentforce, and Contentful’s composable APIs, global enterprises can be capable of seamlessly deliver personalized, AI-assembled experiences at scale across every channel.
Salesforce, Inc. designs and develops cloud-based enterprise software for customer relationship management. Its solutions encompass customer service and support, sales force automation, digital commerce, marketing automation, collaboration, community management, industry-specific solutions, and Salesforce platforms. It also offers training, guidance, support, and advisory services.
3. ServiceNow, Inc. (NYSE:NOW)
Number of Hedge Fund Holders: 108
ServiceNow, Inc. (NYSE:NOW) is one of the best AI software stocks to buy according to hedge funds. ServiceNow, Inc. (NYSE:NOW) and Inspira Enterprise announced on June 17 a strategic partnership positioning the latter as a trusted delivery partner that brings the full capabilities of the former to enterprises across the globe. Inspira Enterprise is a global cybersecurity and AI services provider.
The company further reported that, building on its commitment to responsible AI innovation, Inspira deployed the ServiceNow AICT as the enterprise-wide governance layer for its AI ecosystem, with the platform offering centralised visibility, oversight, and lifecycle management across all AI assets. These include agentic workflows, AI agents, datasets, models, prompts, and skills, ranging from intake and assessment through monitoring, deployment, and optimization.
ServiceNow, Inc. further reported that its AICT also provides Inspira’s customers with a proven framework for AI portfolio management, regulatory compliance, risk oversight, and value realization, which allows organizations to scale AI adoption with confidence.
ServiceNow, Inc. offers an AI platform for business transformation, boosting productivity and maximizing business outcomes. Its intelligent platform, Now Platform, provides end-to-end workflow automation for digital businesses. Now Platform functions as a cloud-based solution embedded with AI and ML.
2. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 265
Alphabet Inc. (NASDAQ:GOOG) is one of the best AI software stocks to buy according to hedge funds. Reuters reported on June 17 that Britain’s competition watchdog has ordered Alphabet Inc.’s Google to provide greater transparency on the workings of its search ranking, which is a part of the new rules that aim to secure a “fairer deal” for businesses and address the concerns associated with the company’s dominance in the sector. It further reported that according to the Competition and Markets Authority’s statement on Wednesday, Google’s organic search results must be ranked using objective criteria, along with the introduction of clearer complaint processes, increased transparency over ranking, and allowing the transfer of their search data to authorized third parties.
Reuters also stated that Google has been assigned a “strategic market status” by the CMA, enabling it to set targeted rules for increased transparency, as Alphabet Inc. accounts for over 90% of UK search queries. CMA Executive Director Will Hayter stated that “Step by step, we’re ensuring that Google’s search services work better for businesses and consumers across the UK”.
Alphabet Inc. is a holding company with segments including Google Services, Google Cloud, and Other Bets. The Google Services segment operates various services and products, including Android, Google Maps, Google Play, Chrome, Search, and YouTube.
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 282
Microsoft Corporation (NASDAQ:MSFT) is one of the best AI software stocks to buy according to hedge funds. Reuters reported on June 16 that Oracle clarified on Tuesday that the details mentioned in a Business Insider report regarding the collapse of its discussions with Microsoft Corporation (NASDAQ:MSFT) over a potential leasing deal were inaccurate. The report had stated that Microsoft Corporation and Oracle’s discussions about a cloud infrastructure leasing deal fell apart due to security and compliance concerns. Reuters further stated that it could not immediately verify the report, and Microsoft Corporation declined to comment on it.
In a separate development, Reuters reported on June 2 that Microsoft Corporation announced a “sweeping slate” of AI initiatives to go beyond apps, ranging from Nvidia-powered PCs and a new in-house reasoning model to autonomous workplace assistants and gadgets. The company aims at remaking computing around AI at Microsoft Build, its annual software developer conference in San Francisco, and also showed off a new computer called the Surface RTX Spark Dev Box loaded with an Nvidia chip. The computer was called a “dream machine” by CEO Satya Nadella, who added that he was on the wait list to buy it.
Microsoft Corporation develops and supports services, software, devices, and solutions. It operates through the Intelligent Cloud, Productivity and Business Processes, and More Personal Computing segments.
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