Companies today allocate significant resources to various aspects of software infrastructure, including servers and data centers for secure data storage and processing, cloud migration and management for scalable environments, network monitoring and management to ensure stability and security, and communication software. Additionally, software delivery and deployment solutions streamline application deployment, while bug tracking and error handling systems manage and resolve software issues. The increasing demand for cloud computing, digital transformation, and the integration of advanced technologies like artificial intelligence and machine learning are expected to drive substantial growth in the global software infrastructure sector. As organizations continue to prioritize agility, scalability, and efficiency, the software infrastructure market is projected to expand rapidly.
According to a January 2025 report by The Business Research Company, the infrastructure software market size is projected to grow from $210 billion in 2024 to $220 billion in 2025, with a growth rate of 5.1%. The market has experienced strong growth in recent years due to spending on legacy system modernization, the increase in remote work, cybersecurity concerns, automation, and application performance optimization. The research firm anticipates continued strong growth, with the market expected to reach around $283 billion by 2029, at a compounded annual growth rate (CAGR) of 6.5%.
Major players in the sector will continue to play a significant role by investing heavily in enhancing their offerings to capture market share. These companies are focusing on developing innovative solutions that leverage AI and automation to improve operational efficiency and enhance the user experience.
Cantor Fitzgerald analyst Thomas Blakey recently initiated coverage of 18 names in infrastructure and artificial intelligence software. In a research note to investors, he highlighted the growing importance of infrastructure software due to the ongoing secular expansion of AI and generative AI. These developments drive the demand for unified, secure, and highly integrated data systems, observable infrastructure, real-time computing and networking capabilities, and enhanced workflows and collaboration. Additionally, the analyst expects cloud infrastructure platforms to be pivotal in consolidating these functions.
Now, let’s explore the 10 best software infrastructure stocks to buy according to analysts.
A software engineer in front of a monitor making coding changes for cloud-native solutions.
Our Methodology
To identify the 10 best software infrastructure stocks, we conducted extensive research to compile a list of fundamentally strong U.S. listed software infrastructure companies with a market capitalization of $2 billion and above. We then ranked the stocks in ascending order of their potential upside, with the stock having highest upside ranked at the top.
Note: all pricing data is as of market close on February 7.
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10 Best Software Infrastructure Stocks to Buy According to Analysts
10. Gen Digital Inc. (NASDAQ:GEN)
Upside Potential: 19%
Number of Hedge Funds: 27
Gen Digital Inc. (NASDAQ:GEN) is a provider of cybersecurity solutions and digital privacy services, dedicated to protecting both personal and organizational data across various platforms. The company’s product suite includes antivirus software, performance management, identity theft protection, and online privacy tools. Gen Digital Inc. (NASDAQ:GEN) owns a portfolio of trusted brands such as Norton, Avast, LifeLock, Avira, AVG, ReputationDefender, and CCleaner.
On January 30, Gen Digital Inc. (NASDAQ:GEN) released its Q3 2025 earnings results (fiscal year ending March 2025), which met street expectations. While the company reported a 4% year-over-year (YoY) increase in revenue to $986 million, adjusted EPS of $0.56 grew 15% YoY driven by cost discipline and improved operating leverage. Management also noted a slight increase in average revenue per user (ARPU), reflecting strong cross-sell and upsell momentum.
In a notable move, Gen Digital Inc. (NASDAQ:GEN) announced the acquisition of MoneyLion for $1.0 billion in cash (in addition to a $23/share CVR issued) in early December 2024. MoneyLion, a fintech company, operates a digital ecosystem for consumer finance. This acquisition aims to diversify Gen Digital Inc. (NASDAQ:GEN) into the full lifecycle of credit and financial wellness offerings for consumers, expanding into a $30 billion Consumer Digital Finance and Financial Marketplace, which is experiencing high-single to double-digit growth. The deal is expected to close in the first half of FY 2026. The company’s strong position to capitalize on the increasing demand for cybersecurity solutions, driven by rising cyber threats and data breaches, coupled with this expansion of its product portfolio, supports its future growth prospects.
9. Microsoft Corp. (NASDAQ:MSFT)
Upside Potential: 22%
Number of Hedge Funds: 279
Microsoft Corp. (NASDAQ:MSFT) is a giant in the tech industry, offering a broad array of software, services, devices, and solutions designed to empower individuals and organizations to achieve productivity and computing prowess. Its cloud computing platform, Azure, is a major player in the cloud services market, providing scalable and flexible solutions for businesses of all sizes. Additionally, Microsoft Corp. (NASDAQ:MSFT) offers products such as Microsoft 365, Windows, LinkedIn, Dynamics business solutions, server products, and gaming.
The company is currently focusing on integrating AI across its products to enhance data processing capabilities and operational efficiency, which should increase demand for its offerings. It has been aggressively expanding its cloud services, with Azure experiencing substantial growth driven by the rising demand for cloud computing and AI solutions. In its Q2 FY 2025 (FY ending June 2025) report on January 29, Microsoft Corp. (NASDAQ:MSFT) reported a total revenue growth of 12% year-over-year (YoY), with cloud revenue growing 21% and achieving a gross margin of 70%. They are also planning to invest about $80 billion in fiscal 2025 on developing data centers in order to train AI models and deploy AI and cloud-based applications. Company CFO Amy Hood remains optimistic about AI-driven cloud services growth, stating:
“Revenue will continue to be driven by Azure, which, as a reminder, can have quarterly variability primarily from in-period revenue recognition depending on the mix of contracts. In Azure, we expect Q3 revenue growth to be between 31% and 32% in constant currency driven by strong demand for our portfolio of services. As we shared in October, the contribution from our AI services will grow from increased AI capacity coming online. In non-AI services, healthy growth continues, although we expect ongoing impact through H2 as we work to address the execution challenges noted earlier.”
8. Synopsys Inc. (NASDAQ:SNPS)
Upside Potential: 23%
Number of Hedge Funds: 53
Synopsys Inc. (NASDAQ:SNPS) is a leading provider of electronic design automation (EDA) software and services, specializing in the development of integrated circuits and systems. The company offers a comprehensive suite of tools that enable designers to create, verify, and manufacture complex semiconductor devices. Synopsys’ solutions are critical for various applications, including automotive, consumer electronics, and artificial intelligence, supporting the design and verification of chips that power modern technology.
Synopsys Inc. (NASDAQ:SNPS) announced a deal to acquire Ansys (NASDAQ:ANSS) for $35 billion in January 2024, which is still awaiting regulatory approvals and is expected to close in the first half of 2025. Throughout 2024, Synopsys has been rationalizing its product portfolio to gain these approvals. On January 6, 2025, both companies announced the sale of Ansys’ PowerArtist business (a design-for-power platform) to Keysight Technologies Inc. (NYSE:KEYS) as a necessary measure to secure regulatory approval for the acquisition. During the second week of January, Synopsys Inc. (NASDAQ:SNPS) received Phase 1 approvals from the UK CMA and the European Commission.
The company is well-positioned to benefit from the increasing complexity of semiconductor designs driven by advancements in AI, machine learning, and IoT. With hyperscalers and original equipment manufacturers (OEMs) bringing more of their design flow in-house, Synopsys Inc. (NASDAQ:SNPS) is expected to see increased demand for its Electronic Design Automation tools and services.
7. SentinelOne Inc. (NYSE:S)
Upside Potential: 25%
Number of Hedge Funds: 37
SentinelOne Inc. (NYSE:S) is a cybersecurity company that excels in endpoint protection solutions powered by artificial intelligence. The company offers its Singularity platform, which integrates prevention, detection, response, and hunting capabilities to safeguard organizations against advanced cyber threats. Its technology is designed to secure endpoints across various environments, including cloud, on-premises, and hybrid infrastructures.
In early December, SentinelOne Inc. (NYSE:S) announced its Q3 2025 earnings results for the quarter ending October 2024. The company’s revenue surged by 28% year-over-year (YoY) to $210.6 million, and its annualized recurring revenue (ARR) increased by 29% to reach $859.7 million. This growth was driven by the number of customers with ARR exceeding $100,000, which grew by 24% to 1,310 during the quarter. Significantly, the company reduced its operating losses, with the adjusted operating loss margin improving from (11)% to (5)%. SentinelOne also achieved positive free cash flow on a trailing twelve-month basis for the first time. Based on this strong performance, the company raised its FY 2025 revenue growth outlook to 32%. SentinelOne Inc. (NYSE:S) is well-positioned to capitalize on the increasing demand for cybersecurity solutions as organizations continue to face sophisticated cyber threats.
Oppenheimer analyst recently initiated coverage of SentinelOne Inc. (NYSE:S) with an Outperform rating and a $32 price target. The analyst highlighted several factors for this positive outlook, including an improved leadership team, enhanced operational execution, and a stronger sales and go-to-market strategy. He also emphasized the company’s potential in non-endpoint security, noting significant cross-sell and upsell opportunities. Moreover, the analyst believes that the consensus is underestimating SentinelOne Inc. (NYSE:S)’s recent strategic adjustments and the overall value of its platform.
6. Onestream Inc. (NASDAQ:OS)
Upside Potential: 26%
Number of Hedge Funds: 24
Onestream Inc. (NASDAQ:OS) offers a unified, AI-enabled, and extensible software platform known as the Digital Finance Cloud, which integrates core financial functions with broader operational data and processes within a single platform. This software is designed to streamline financial processes, enhance data accuracy, and provide real-time insights, enabling large and medium-sized organizations to make well-informed decisions. Onestream is dedicated to investing in a productive partnership ecosystem that accelerates the adoption of its platform and facilitates more efficient implementation.
On January 16, Morgan Stanley upgraded Onestream Inc. (NASDAQ:OS) to Overweight from Equal Weight, with a price target of $37. The analyst cited the company’s superior data platform, exceptional management team, and multiple growth drivers in 2025 as reasons for the upgrade, suggesting it could outperform consensus earnings expectations. The analyst also noted that the company’s valuation is more attractive compared to peers, with potential for better valuation due to its durable mid-20s growth potential. Onestream Inc. (NASDAQ:OS) reported strong Q3 2024 results, with a 39% year-over-year (YoY) increase in subscription revenue and an 18% rise in customer count. The company is scheduled to report its Q4 2024 earnings results on February 11.
5. Informatica Inc. (NASDAQ:INFA)
Upside Potential: 36%
Number of Hedge Funds: 22
Informatica Inc. (NASDAQ:INFA) specializes in data integration and management solutions, focusing on cloud data management, data governance, data catalog, and data quality. The company’s Intelligent Data Management Cloud (IDMC), powered by its AI engine CLAIRE, delivers top-tier solutions that enable enterprises to connect virtually all types of data, govern and protect critical and sensitive information, and prepare data for AI and other strategic data-driven initiatives.
On December 12, 2024, Truist Securities initiated coverage of Informatica Inc. (NASDAQ:INFA) with a Buy rating and a $34 price target. The analyst identified Informatica as a key player in enterprise data management, addressing data silos that have developed over time and persist in cloud environments. With many enterprises seeking solutions compatible with their existing data stacks rather than fully re-platforming, Informatica Inc. (NASDAQ:INFA) is well-positioned to benefit. The analyst believes this urgency among its customers could drive faster cloud adoption and overall growth than currently anticipated by the market. This positions Informatica Inc. (NASDAQ:INFA) for significant opportunities and strong future performance.
4. MongoDB Inc. (NASDAQ:MDB)
Upside Potential: 44%
Number of Hedge Funds: 49
MongoDB Inc. (NASDAQ:MDB) is a developer data platform company that provides modern database platforms and related services for developers. The company’s flagship product, MongoDB Atlas, is a fully managed multi-cloud developer data platform that allows organizations to build and scale applications quickly and efficiently. According to the company’s last annual report, IDC estimates the data management software market, the company’s primary market, is projected to grow from $94 billion in 2023 to approximately $153 billion in 2027, with a CAGR of 13%.
The investment management company, Montaka Global Investments, stated the following regarding MongoDB Inc. (NASDAQ:MDB) in their Q4 2024 investor letter:
“As a database provider for large production-ready applications, MDB has suffered of late because software developers have overwhelmingly focused on small, experimental AI-based ‘proof of concepts’ rather than production deployments. We expect this cycle to turn in 2025 and beyond, and its possible (though not certain) that demand for MDB accelerates materially.
There are strong arguments for why MDB should thrive in a world in which AI is infused into applications. These include – a) As one of the largest and well-established database offerings available for ‘unstructured data’, MDB should benefit from new AI applications on the basis that 80-90% of the world’s data is inherently unstructured. B) Relational databases (e.g. Oracle) that handle structured data that align to a fixed schema, lack the flexibility required to handle the rapid changes and evolutions that are taking place in AI. C) New AI coding agents can now automate the (previously too time consuming) transfers of data from a relational database to a more flexible MDB. Given MDB’s market share of the overall database market is only approximately 2% today, small changes in market share would likely translate into outsized percentage gains in MDB’s value.”
3. Adobe Inc. (NASDAQ:ADBE)
Upside Potential: 44%
Number of Hedge Funds: 123
Adobe Inc. (NASDAQ:ADBE) is a premier software company recognized for its creative and digital marketing solutions. The company provides a comprehensive suite of products, including Adobe Creative Cloud, Adobe Document Cloud, and Adobe Experience Cloud, which cater to a wide array of customers from individual creatives to large enterprises. Adobe’s software solutions are essential for content creation, digital marketing, and document management, establishing it as a key player in the digital transformation arena.
Adobe Inc. (NASDAQ:ADBE) is well-positioned to take advantage of the rising demand for digital content creation and marketing solutions, driven by the growing importance of online presence for businesses. The company’s subscription-based model offers a stable and recurring revenue stream, contributing to its strong financial performance. The total addressable market for its solutions is expected to expand significantly as more businesses adopt digital tools for marketing and content creation.
On January 15, 2025, Exane BNP Paribas upgraded Adobe Inc. (NASDAQ:ADBE) to Neutral from Underperform with a $425 price target, seeing an improved risk/reward at current levels. The firm also believes that the shares may find near-term support as management addresses near-term concerns. During a December 2024 appearance on CNBC, Derek Yan, Senior Investment Strategist at KraneShares, stated that AI integration in Adobe Inc. (NASDAQ:ADBE) products will be a future game changer for the company. He mentioned that customers can now learn its complex software/tools much quicker using AI agents, and with the company’s ‘Adopt first, monetize later’ strategy, monetization will gradually ramp up.
2. Nebius Group (NASDAQ:NBIS)
Upside Potential: 102%
Number of Hedge Funds: N/A
Nebius Group (NASDAQ:NBIS) provides infrastructure and services to AI builders globally through its AI-centric cloud platform, Nebius AI. This platform offers full-stack infrastructure, including large-scale GPU clusters, cloud services, and developer tools. The company also operates Toloka, a data partner for generative AI development stages; TripleTen, an edtech platform for reskilling individuals for tech careers; and Avride, which develops autonomous driving technology for self-driving cars and delivery robots.
Previously known as Yandex, the company was suspended from trading in 2022 after Russia’s invasion of Ukraine. It rebranded to Nebius Group (NASDAQ:NBIS) in October 2024 after divesting its Russian assets. As of September 30, 2024, the company had an annualized run-rate revenue of $120 million, with expectations to reach $170 million to $190 million by the end of 2024.
In early December 2024, Nebius Group (NASDAQ:NBIS) raised approximately $700 million through a private placement financing from institutional and accredited investors, including Accel, NVIDIA, and Orbis Investments. The funds will be used to expand its full-stack AI infrastructure.
Citron Research recently released their bull thesis on the stock (Read the full report by Citron) and said that investor can’t afford to overlook stock’s new narrative. The report states:
“Citron believes that the current opportunity to buy Nebius stock is unique, with Wall Street analysts yet to initiate coverage on the company. As Nebius continues to ramp up its operations, including further capital raises, we expect analyst attention to increase, which will likely drive the stock price higher. Nebius is projected to generate nearly $1 billion in revenue by 2025, largely driven by its data center infrastructure. This business is growing rapidly, and the recent $700 million capital raise from Nvidia and Accel Partners provides a strong financial foundation for Nebius’ future growth.”
1. Palo Alto Networks Inc. (NASDAQ:PANW)
Upside Potential: 119%
Number of Hedge Funds: 64
Palo Alto Networks Inc. (NASDAQ:PANW) is a leading cybersecurity company offering a comprehensive suite of security and zero-trust solutions designed to shield organizations from cyber threats. The company provides advanced firewalls, cloud-based security services, and endpoint protection, enabling businesses to secure their networks, applications, and data across various environments, including on-premises, cloud, and hybrid infrastructures.
With a strong emphasis on innovation, Palo Alto Networks Inc. (NASDAQ:PANW) incorporates artificial intelligence, machine learning, and automation into its security offerings to enhance threat detection and response capabilities. Palo Alto Networks Inc. (NASDAQ:PANW) aims to capture a larger share of the cybersecurity market, which is projected to grow substantially in the coming years. According to a report published by Statista in June 2024, the estimated cost of cybercrime may reach $15.6 trillion by 2029, up from $9.2 trillion in 2024. Thus, the company is well-positioned to benefit from the rising demand for cybersecurity solutions, driven by the increasing frequency and sophistication of cyberattacks.
On January 21, 2025, an analyst from Morgan Stanley raised the price target for Palo Alto Networks Inc. (NASDAQ:PANW) from $223 to $230 and maintained an Overweight rating. The analyst views the current valuation as a favourable entry point, given recent underperformance, and anticipates potentially larger deals and stronger market share gains for the company. The analyst also believes that the stock could double in 4-5 years, driven by platform deals and increased market share.
While we acknowledge the potential of PANW to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than PANW but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
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