In this article, we will discuss the Top 10 Software and Technology Stocks to Buy Now.
More often than not, the stock markets tend to behave like a pendulum, swinging from overvalued to undervalued and back to overvalued again. This has been one of such times, according to Morningstar. While the firm continues to advise investors to invest on a long-term basis, the recent short-term market fluctuations have created opportunities.
What Lies Ahead?
Despite the technology sector being overvalued, Morningstar sees targeted investment opportunities as the confidence in secular tailwinds, like cloud computing, as well as the long-term expansion of semiconductor demand, remains unchanged. That being said, within the technology sector, Gen AI happens to be the most important investment theme.
As per Middlefield, an asset management company, the technology sector is well-positioned. For Q2 2025, the broader Information Technology sector is expected to lead the S&P 500 with the highest YoY revenue growth. Furthermore, it is expected to exhibit the highest earnings growth among all other sectors for the full year, added the firm. This strong growth profile makes the sector attractive despite the valuations no longer being cheap.
Amidst these trends, we will now have a look at the Top 10 Software and Technology Stocks to Buy Now.
Our Methodology
To list the Top 10 Software and Technology Stocks to Buy Now, we sifted through several online rankings to shortlist the stocks catering to the broader software and technology sector. Next, we chose the ones popular among hedge funds. Finally, the stocks were arranged in an ascending order of their hedge fund sentiments, as of Q1 2025.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Top 10 Software and Technology Stocks to Buy Now
10. LiveRamp Holdings, Inc. (NYSE:RAMP)
Number of Hedge Fund Holders: 30
LiveRamp Holdings, Inc. (NYSE:RAMP) is one of the Top 10 Software and Technology Stocks to Buy Now. DA Davidson initiated coverage on the company’s stock with a “Buy” rating and a price objective of $45.00. The research firm cited the company’s underappreciated network effects and growing importance as a critical intermediary in the broader data collaboration ecosystem as the critical factors for the positive outlook. Notably, the firm expects top-line growth reacceleration in FY 2027 as a potential catalyst for LiveRamp Holdings, Inc. (NYSE:RAMP)’s stock.
DA Davidson managed to identify numerous growth drivers for LiveRamp Holdings, Inc. (NYSE:RAMP), such as upselling opportunities with cross-media intelligence and clean room solutions, pricing redesign tailwinds, as well as continued mid-teens growth in its data marketplace. LiveRamp Holdings, Inc. (NYSE:RAMP) closed FY 2025 with 128 customers whose annualized subscription revenue surpasses $1 million as compared to 115 in the prior year, with current remaining performance obligations (CRPO) coming at $471 million, up 14% compared to the prior-year period.
The company remains focused on helping customers optimize the ad spend through harnessing the power of its Data Collaboration Network and prudently managing its costs and growth investments. LiveRamp Holdings, Inc. (NYSE:RAMP) is a technology company that is engaged in operating a data collaboration platform.
9. Sportradar Group AG (NASDAQ:SRAD)
Number of Hedge Fund Holders: 31
Sportradar Group AG (NASDAQ:SRAD) is one of the Top 10 Software and Technology Stocks to Buy Now. Jefferies analyst David Katz upped the target price on the company’s stock to $32 from $27, while maintaining a “Buy” rating. The firm trimmed estimates for Sportradar Group AG (NASDAQ:SRAD), but has raised its multiple given that it sees the company’s strong growth profile. The firm also gave credit for the value of the IMG ARENA deal. Overall, the firm reiterated a bullish view on the online gaming sector.
IMG ARENA’s portfolio is expected to enhance Sportradar Group AG (NASDAQ:SRAD)’s content and product offering and further strengthen the position as a leading content provider in the most bet-upon global sports, such as tennis, soccer, and basketball. Notably, the addition of these betting rights to its content portfolio increases Sportradar Group AG (NASDAQ:SRAD)’s depth and breadth in critical global sports, expanding the content distribution and fueling product development.
Thanks to the highly scalable technology platform and extensive client network, Sportradar Group AG (NASDAQ:SRAD) is expected to seamlessly integrate and monetize the rights, fueling incremental value. The acquisition is expected to further accelerate Sportradar Group AG (NASDAQ:SRAD)’s strong revenue, adjusted EBITDA, and cash flow growth.
Sportradar Group AG (NASDAQ:SRAD) offers sports data services for the sports betting and media industries. It provides betting technology and solutions, such as betting and gaming content, real-time sports data points, among other offerings.
8. CoreWeave, Inc. (NASDAQ:CRWV)
Number of Hedge Fund Holders: 36
CoreWeave, Inc. (NASDAQ:CRWV) is one of the Top 10 Software and Technology Stocks to Buy Now. Mizuho downgraded the company’s stock to “Neutral” from “Outperform” with a price objective of $150, up from the prior target of $70, as reported by The Fly. The rating change comes after the company’s announcement that it agreed to acquire Core Scientific, combining 2 significant players in the AI infrastructure space.
The firm sees this acquisition positively, noting that it allows CoreWeave, Inc. (NASDAQ:CRWV) to verticalize the infrastructure supply chain while, at the same time, driving significant cost synergies and allowing for more financing flexibility. Mizuho views CoreWeave, Inc. (NASDAQ:CRWV)’s stock as fairly valued at the current levels, with risks around customer concentration. The acquisition accelerates CoreWeave, Inc. (NASDAQ:CRWV)’s strategy to deploy AI and HPC workloads at scale. While this company will gain greater control over a critical power footprint and optionality for future power capacity, Core Scientific’s data center development capabilities tend to complement and augment CoreWeave, Inc. (NASDAQ:CRWV)’s extensive expertise in power procurement, construction, and site management for the infrastructure assets.
7. Sandisk Corporation (NASDAQ:SNDK)
Number of Hedge Fund Holders: 44
Sandisk Corporation (NASDAQ:SNDK) is one of the Top 10 Software and Technology Stocks to Buy Now. Jefferies analyst Blayne Curtis began coverage of the company’s stock with a “Buy” rating and a price objective of $60. As per the firm, Sandisk Corporation (NASDAQ:SNDK)’s spin-off from Western Digital can unlock shareholder value, while the company’s updated technology roadmap can help facilitate enterprise solid-state drive (eSSD) market share gains. If Sandisk Corporation (NASDAQ:SNDK)’s content and unit trends sustain despite the tariff pressures, there can be upside to estimates, added the firm’s analyst.
The company’s investment, supply management, and pricing strategies remain focused on maximizing returns. During Q3 2025, Sandisk Corporation (NASDAQ:SNDK)’s innovation was reinforced, with a strong early ramp of BiCS 8, which is its latest technology engineered to offer industry-leading performance, power efficiency, and density. For Q4 2025, the company expects revenue of between $1.75 billion – $1.85 billion. It expects gross margin in the range of 25.3% – 26.7%.
Sandisk Corporation (NASDAQ:SNDK) is a leading player in the broader technology space since it innovates in digital storage technologies, helping power the data-driven world.
Parnassus Investments, an investment management company, released Q1 2025 investor letter. Here is what the fund said:
“Sandisk Corporation (NASDAQ:SNDK) is a global leader in data storage solutions using flash memory technology. The company was spun off from our holding in Western Digital Corp. We believe that SanDisk can benefit cyclically from anticipated increases in NAND memory demand and secularly from demand for AI data centers.”
6. CACI International Inc (NYSE:CACI)
Number of Hedge Fund Holders: 52
CACI International Inc (NYSE:CACI) is one of the Top 10 Software and Technology Stocks to Buy Now. William Blair analyst Louie DiPalma upgraded the company’s stock to “Outperform” from “Market Perform,” as reported by The Fly. The firm opines that the One Big Beautiful Bill Act features extensive drone funding. The firm’s analysis reflects that CACI International Inc (NYSE:CACI) happens to be one of the industry’s largest counter-drone system providers, describing this position as “under-the-radar.”
The firm opines that CACI International Inc (NYSE:CACI)’s shares provide valuation-focused investors an opportunity for drone exposure at a discount to peers. The company was awarded a 5-year task order valued at up to $66 million in order to continue helping the U.S. Navy’s Naval Sea Systems Command (NAVSEA) and the Naval Surface Warfare Center (NSWC) Carderock Division. CACI International Inc (NYSE:CACI) was also awarded a 5-year task order valued at up to $54 million to continue its support to the U.S. Army Product Manager Ground Sensors. The company is expected to provide current and future operational capability and efficiency across the life cycle of critical ground sensors, which include night vision, electro-optics, and thermal systems utilised by warfighters.
CACI International Inc (NYSE:CACI) is engaged in providing expertise and technology to enterprise and mission customers in support of national security in the intelligence, defense, and federal civilian sectors.
Frontier Capital Management, an investment management company, released its Q1 2025 investor letter. Here is what the fund said:
“The market volatility has created several opportunities to invest in companies at prices we find attractive, and thus we have initiated new positions in a variety of industries. Examples include CACI International Inc (NYSE:CACI) Amentum Holdings, Inc., Essential Properties Realty Trust, Inc., and DigitalOcean Holdings, Inc. CACI and Amentum both provide essential services to the Department of Defense and other governmental agencies. These companies recently saw a dramatic decline in their stock prices as investors became concerned that the newly formed Department of Government Efficiency (DOGE) would recommend cuts across all government areas. While pruning inefficient spending is likely, we believe that the mission critical nature of the projects on which CACI and Amentum work, together with the considerable cost the government would incur to bring this work in-house, are testaments to the value these companies provide. While some projects may be delayed, increased spending on defense and digital infrastructure should enable these companies to grow earnings during the next few years. Essential Properties owns and leases properties with a focus on regional and local mid-level markets. It is well capitalized and has a low percentage of leases rolling off over the next few years.”
5. Ciena Corporation (NYSE:CIEN)
Number of Hedge Fund Holders: 58
Ciena Corporation (NYSE:CIEN) is one of the Top 10 Software and Technology Stocks to Buy Now. Morgan Stanley downgraded the company’s stock to “Underweight” from “Equal Weight” with a price objective of $70, down from the prior target of $73. The downgrade was seen despite the significant opportunities in the broader optical AI market, with Morgan Stanley highlighting disappointing margin performance as a key concern.
As per the firm’s analyst, Ciena Corporation (NYSE:CIEN)’s shares trade above its 3-year valuation average, which creates a risk/reward skewed more negatively, considering the minimal earnings follow-through on the revenue upside. That being said, the firm expects Ciena Corporation (NYSE:CIEN) to continue posting revenue upside over the upcoming quarters as a result of its artificial intelligence opportunity. However, the firm doesn’t believe that Ciena Corporation (NYSE:CIEN)’s earnings growth accompanying the upside would be meaningful.
The company’s robust fiscal Q2 2025 results exhibit continued global leadership in high-speed connectivity with increased momentum throughout all of the business segments. Amidst accelerating demand aided by cloud and AI, Ciena Corporation (NYSE:CIEN)’s performance continues to validate the durability of a positive network infrastructure spending environment. The company saw revenue of $1.13 billion compared to $910.8 million for Q2 2024. Scout Investments, Inc., an affiliate of Carillon Tower Advisers, released the Q1 2025 investor letter. Here is what the fund said:
Ciena Corporation (NYSE:CIEN) develops and markets networking equipment, software, and services for the telecommunications industry and large cloud service firms. Its offerings include optical network switches and routing platforms. There have been major tariff concerns due to its production concentration in Mexico and Thailand. The stock was also negatively impacted, along with many other AI infrastructure suppliers, following the DeepSeek model release, which caused broad concerns that growth in AI capital spending would slow. The company has improved inventory management and could raise prices to offset tariffs. Also, telecom and cloud spending continues to improve and Ciena is well positioned to benefit from a continuous infrastructure buildout, with growing demand for data center capacity and connectivity.
4. KLA Corporation (NASDAQ:KLAC)
Number of Hedge Fund Holders: 61
KLA Corporation (NASDAQ:KLAC) is one of the Top 10 Software and Technology Stocks to Buy Now. Wells Fargo downgraded the company’s stock to “Equal Weight” from “Overweight” with a price objective of $920, up from the prior target of $870, as reported by The Fly. As per the firm, the company’s shares have significantly outperformed the group and trade well above the median price to earnings at ~26x. Wells Fargo anticipates KLA Corporation (NASDAQ:KLAC) to outperform the wafer fab equipment (WFE) market overall. However, it questioned the ability to provide further upside.
KLA Corporation (NASDAQ:KLAC) demonstrated optimism about its growing relevancy in semiconductor manufacturing. The leadership in process control remains a critical enabler of leading-edge AI investments by its customers. In Q3 2025, the company saw total revenues of $3.06 billion. It saw GAAP diluted EPS of $8.16 and non-GAAP diluted EPS of $8.41. Both of these were above the midpoints of their respective guidance ranges.
Parnassus Investments, an investment management company, released the Q4 2024 investor letter. Here is what the fund said:
“We also added several new positions, including two in Information Technology: Workday, a category leader for enterprise cloud applications for finance and human resources, and KLA Corporation (NASDAQ:KLAC), a leader in semiconductor process control. KLA, a leader in semiconductor process control, benefits from inherently high switching costs, structurally higher demand for advanced semiconductors and increasingly complex semiconductor manufacturing. The company has a strong management team that is positioning it well for long-term growth. Concerns about weaker demand in China have impacted KLA’s stock price recently, but we believe the secular growth in other regions could offset the risk in the longer term.”
3. Autodesk, Inc. (NASDAQ:ADSK)
Number of Hedge Fund Holders: 82
Autodesk, Inc. (NASDAQ:ADSK) is one of the Top 10 Software and Technology Stocks to Buy Now. DA Davidson upgraded the company’s stock to “Buy” from “Neutral” with a price objective of $375, up from the prior target of $305, as reported by The Fly. As per the firm, the recent improvements in Autodesk, Inc. (NASDAQ:ADSK)’s cost structure, governance, and execution exhibit that it remains on a path to reach top-quartile operating performance in the vertical and back-office software group.
The transaction model changes are expected to create noise around margins, but the firm opines that Autodesk, Inc. (NASDAQ:ADSK) has room to fuel efficiencies supportive of the significant profit growth. As per the analyst, the company remains only just above the peer median for GAAP operating margins, but there is a significant opportunity for Autodesk, Inc. (NASDAQ:ADSK) to improve margins over the upcoming few years and finally reach top decile levels. The company continues to focus on strategic priorities in cloud, platform, and AI, and is optimizing its sales and marketing to fuel increased margins.
For FY 2026, Autodesk, Inc. (NASDAQ:ADSK) expects Billings in the range of $7,160 million – $7,310 million, and the GAAP operating margin of between 21% – 22%. Parnassus Investments, an investment management company, released its Q3 2024 investor letter. Here is what the fund said:
“In Software, we added Autodesk, Inc. (NASDAQ:ADSK) and Cloudflare while exiting Bill.com. We believe Autodesk’s dominant position in architecture, engineering and construction software allows it to increase margins and offer attractive revenue growth. Autodesk is a market-leading vertical software company with the ability to meaningfully improve its margins, while its revenue growth should accelerate as it completes its sales channel re-alignment.”
2. Applied Materials, Inc. (NASDAQ:AMAT)
Number of Hedge Fund Holders: 83
Applied Materials, Inc. (NASDAQ:AMAT) is one of the Top 10 Software and Technology Stocks to Buy Now. Rothschild & Co Redburn downgraded the company’s stock to “Neutral” from “Buy” with a price objective of $200, down from the prior target of $225, as reported by The Fly. As per the firm, China’s push for semiconductor self-sufficiency tends to challenge much of the company’s portfolio. This comes when competitors have taken a share in Applied Materials, Inc. (NASDAQ:AMAT)’s core physical vapor deposition business. Furthermore, the firm is concerned that the U.S. export restrictions might ramp up China’s strategy to become 70% self-sufficient in semiconductor wafer fabrication equipment.
However, Applied Materials, Inc. (NASDAQ:AMAT)’s broad capabilities and connected product portfolio continue to drive robust results in 2025 amidst a dynamic macro environment. Since high-performance, energy-efficient AI computing is the dominant driver of semiconductor innovation, Applied Materials, Inc. (NASDAQ:AMAT) continues to work with its customers and partners to accelerate the broader industry’s roadmap. For Q3 2025, the company expects total net revenue of $7,200 million (+/- $500 million), and a non-GAAP gross margin of 48.3%.
Vltava Fund, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:
“In the quarter just ended, we added to the portfolio two new companies from the technology sector: Applied Materials, Inc. (NASDAQ:AMAT) and Lam Research. Both are in the same industry as is another of our investments that we have held for some time, KLA Corporation. This industry is termed semiconductor devices and materials. One chapter in Hidden Investment Treasures is devoted to investing in technology companies and, among other things, the controversy over what really constitutes a technology company. As investors, we try to view technology companies not according to the industry into which they are formally classified but by whether the technologies and technological processes used in the production of their products and services are an essential element in value creation or if they are a source of long-term, sustainable competitive advantage. Among the companies that are formally categorized as technology-based and fall into either the Information Technology or the Communications Services sector, we find some that can be said to be just that but also others for which this classification is at least debatable. Similarly, among companies that do not formally belong to these two sectors, we find many that clearly are built to a large extent on technology and base their market positions and competitiveness on it. In the cases of Applied Materials and Lam Research, there can be no doubt that these are technology companies not only as a formality but also in fact.
Applied Materials provides manufacturing equipment, services, and software for the semiconductor, display, and related industries. Its principal business activities are semiconductor systems and Applied Global Services. Its largest customers are Samsung and Taiwan Semiconductors, but its overall clientele is more diversified than is that of Lam Research. At first glance, it would appear that Applied Materials has a somewhat less tangible and definable competitive advantage compared to KLA Corporation and Lam Research, but the numbers do not support such a view. Net margins likewise in the neighborhood of 27% and ROCE around 30% are outstanding. Basically, it can be said that all three companies we own have very similar underlying profitability metrics. Even their valuations, growth, and potential are similar. All have strong free cash flow and strong balance sheets, and they are regularly buying back their own shares over the long term and in large volumes…” (Click here to read the full text)
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 328
Amazon.com, Inc. (NASDAQ:AMZN) is one of the Top 10 Software and Technology Stocks to Buy Now. Wells Fargo upped the price target on the company’s stock to $238 from $201, while keeping an “Equal Weight” rating on the shares, as reported by The Fly. As per the firm, Amazon.com, Inc. (NASDAQ:AMZN)’s shares reflect the best tactical long Q2 2025 EPS setup compared to other mega-cap Internet stocks. The company’s retail trends remain resilient, and supply constraints are easing. Furthermore, there are expectations of AWS acceleration in H2 2025 compared to the muted expectations.
In Q1 2025, Amazon.com, Inc. (NASDAQ:AMZN)’s net sales rose 9% to $155.7 billion as compared to $143.3 billion in Q1 2024, with AWS segment sales rising 17% YoY to $29.3 billion. The company has announced its plans to launch an AWS infrastructure Region in Chile by 2026 end. Amazon.com, Inc. (NASDAQ:AMZN) has also announced $4 billion investment through 2026, focused on expanding its rural delivery network to bring even faster delivery to customers in less densely populated areas throughout the US.
Lakehouse Capital, a Sydney-based investment manager, released its May 2025 investor letter. Here is what the fund said:
“Amazon.com, Inc. (NASDAQ:AMZN) reported a solid quarterly result with net sales up 9% year-on-year (10% in constant currency terms) to $155.7 billion and operating profit up 20% to $18.4 billion. The company’s core e-commerce business remained resilient in the face of potential tariffs, with management noting they hadn’t seen any material change in consumer buying behaviour as at the end of April. Amazon web services (AWS) grew 17% to $29.3 billion which was a slight deceleration from the 19% delivered last quarter. Whilst this seems disappointing at first blush, management reiterated that demand is very strong they are still capacity constrained. Artificial intelligence (AI) continues to be a key growth driver with AI workloads growing in excess of 100% year-on-year on AWS. Overall, it was a positive result, and we remain confident that the company is set to deliver many years of solid revenue growth and margin expansion.”
While we acknowledge the potential of AMZN 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 AMZN and that has 100x upside potential, check out our report about this cheapest AI stock.
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