10 Best Software Stocks to Buy According to Billionaires

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1. Microsoft Corp. (NASDAQ:MSFT)

Number of Billionaire Investors: 39

Billionaire Holdings: $53.4 Billion

Number of Hedge Fund Holders: 317

Microsoft Corp. (NASDAQ:MSFT) develops and markets software, hardware, and cloud services. Its flagship products include the Windows operating system, the Microsoft Office suite, and the Azure cloud platform. Additionally, Microsoft owns LinkedIn, GitHub, and Xbox, extending its influence across various industries.

On March 13, a D.A. Davidson analyst increased the price target for Microsoft Corp. (NASDAQ:MSFT) from $425 to $450 and upgraded the stock to Buy. The analyst referred to Microsoft as the best-positioned company among the “Magnificent 7,” a term used for leading mega technology companies, citing its more disciplined approach to capital expenditures (capex) as a key factor for the upgrade.

This perspective was based on Microsoft’s guidance during the Q2 2025 results call, where the company projected flat sequential capex for Q3 and Q4. Additionally, capex for FY 2026 is expected to be lower than that of FY 2025. The analyst views Microsoft Corp. (NASDAQ:MSFT) as a defensive play due to its relatively limited exposure to consumer end-markets compared to other major tech companies.

While we acknowledge the potential of MSFT to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than MSFT 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 30 Best Stocks to Buy Now According to Billionaires.

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