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.
While we acknowledge the potential of GDDY 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 GDDY and that has 100x upside potential, check out our report about the cheapest AI stock.
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