In this article, we will look at 8 undervalued software stocks to buy now.
The software industry has remained one of the biggest beneficiaries of digital transformation, AI adoption, and technological innovation. However, many software stocks have experienced volatility amid evolving market sentiment and growth expectations. The recent market shift has created opportunities to identify companies whose share prices don’t fully reflect the underlying strength.
On July 10, Reuters published an article titled “U.S. equity funds draw biggest weekly inflow in three weeks on tech earnings hopes,” outlining that the U.S. equity funds reported their largest weekly inflow in three weeks through July 8. This was backed by stronger technology sector earnings expectations and softened worries about additional Federal Reserve rate hikes.
The article further added that solid technology sector earnings expectations ahead of the Q2 reporting season drove heightened demand. Having said that, analysts project an average YoY earnings growth of 40.8% for U.S. large- and mid-cap technology companies, according to LSEG data.
The LSEG data further showed that robust demand for AI solutions has led analysts to lift their average 12-month earnings forecasts for the technology group by 4.2% over the past month, as noted by the author.
With this backdrop in mind, let’s look at the 8 undervalued software stocks to buy now.
Photo by Danial Igdery on Unsplash
Our Methodology
For this article, we considered software stocks with market capitalizations exceeding $2 billion. After this initial screening, we shortlisted stocks with a forward P/E below 22, a range that indicates a reasonable discount to the industry, and an upside potential of at least 20%. We limited our final selection to companies that have recently reported noteworthy developments likely to impact investor sentiment. These stocks are ranked by upside potential in ascending order.
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’s 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. Fiserv, Inc. (NASDAQ:FISV)
Upside Potential as of July 10, 2026: 22.89%
On July 10, Bryan Keane from Citi cut the price target on Fiserv, Inc. (NASDAQ:FISV) to $57 from $60 and reiterated a Neutral rating. The analyst notes that although leadership changes introduce additional uncertainty to the turnaround, the departures are “not really surprising.” The firm believes strategic direction and operational focus presented at the investor day “should continue to serve as meaningful guideposts.”
Recently, several other analysts revised their outlook on Fiserv, Inc. (NASDAQ:FISV). On July 9, Goldman Sachs analyst Will Nance trimmed the price target on the company to $60 from $70 and reaffirmed a Neutral rating. In a research note, the analyst said that the Payments group is comparatively in a stronger position as it enters Q2 earnings, despite poor YTD performance.
Similarly, Wells Fargo lowered the price target on Fiserv, Inc. (NASDAQ:FISV) to $56, down from $62, on the same day. The firm thinks that Q2 projections are achievable, yet it expects limited upside for the shares due to a steep second-half ramp and an unexpected CEO change. With that said, the firm has an Equal Weight rating on the shares.
Fiserv, Inc. (NYSE:FI) is a Wisconsin-based provider of financial services technology. The company offers various products and services, including payment and mobile banking systems, account processing systems, and financial solutions.
7. Atlassian Corporation (NASDAQ:TEAM)
Upside Potential as of July 10, 2026: 29.42%
On July 8, KeyBanc trimmed the price target on Atlassian Corporation (NASDAQ:TEAM) to $115 from $130 and reiterated an Overweight rating. The firm has updated its model to better reflect the views of investors, management, and partners.
The firm lowered its Cloud estimates for FY27, particularly due to softer migration and organic growth assumptions, despite higher data center projections. Overall, KeyBanc anticipates conservative FY27 guidance from management, while viewing this as a clearing event that enhances visibility of near-term trends.
Back on June 25, BMO Capital cut the price target on Atlassian Corporation (NASDAQ:TEAM) to $95 from $105 after readjusting its model. The firm has lowered its data center revenue forecasts for FY27 to negative 22% growth, down from negative 12%. Additionally, the firm reduced its operating margin and free cash flow estimate.
In its analysis, the firm also highlighted the company’s strong product offering and solid distribution and pricing strategies, adding that the stock’s current valuation offers an appealing risk/reward profile. The firm has an Outperform rating. Indeed, Atlassian Corporation (NASDAQ:TEAM) is one of the undervalued software stocks to buy now.
Atlassian Corporation (NASDAQ:TEAM) is an Australian provider of software that facilitates team collaboration. Founded in 2002, the company offers a project management platform, a connected workspace, an asynchronous video communication tool, an intuitive service management solution, and other AI-related tools.
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