In this article, we will discuss the 10 Hot Software Stocks with High Upside Potential.
As per MarkNtel Advisors, which is a leading consulting, data analytics, and market research firm, the US software market is expected to grow at a CAGR of ~7.17% over 2024 – 2030. Possessing a strong legacy of innovation and entrepreneurship, the US has been categorized as a world leader in software development, housing a thriving environment of startups, software corporations, and academic institutions. With businesses using technology to fuel creativity, productivity, and competitiveness, the broader US software market continues to move towards digital transformation throughout all industries.
In a bid to be more flexible, responsive to market demands, and scalable, it’s important to modernize legacy systems, procedures, and infrastructure apart from implementing cutting-edge technologies, says MarkNtel Advisors.
Emerging Trends in Software Industry in 2025
With software development evolving at a significant pace (thanks to technological innovation and dynamic business demands), businesses are required to stay ahead in a bid to remain competitive and deliver ground-breaking software solutions, says Datafortune. The rise of AI-powered development and low-code/no-code platforms, integration of DevSecOps practices, and sustainable software engineering are some of the key trends likely to shape software development in 2025.
AI-powered coding assistants, automation of tools, and intelligent debugging tools continue to transform the working infrastructure of developers. Datafortune believes that businesses are increasingly leveraging AI to automate workflows, accelerate software development, and enhance code quality.
READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.
Low-Code/No-Code Platforms and Sustainable Software Engineering
As per Datafortune, the demand for rapid application development continues to drive the adoption of low-code and no-code platforms. Such platforms allow business users and developers to develop applications with minimal or no coding, which makes software development more accessible. The firm believes that, by 2025, most of the enterprise applications are expected to be created using these platforms, which will reduce the requirement for traditional software development cycles and allow firms to innovate rapidly.
Sustainability continues to become a trend in software development. With companies actively optimizing their apps, green coding, optimal algorithms, and cloud optimization are being adopted as best practices, says Datafortune. Notably, the companies are also prioritizing sustainability in their software development services through the removal of redundant code and minimizing energy consumption in the data centers.
Overall, the broader software industry in 2025 will be characterized by innovations in AI, sustainability, security, and advanced and ground-breaking technologies like quantum computing.
Amidst such trends, we will now have a look at the 10 Hot Software Stocks with High Upside Potential.
A computer programmer working on a holographic digital twin technology software solution.
Our Methodology
To list the 10 Hot Software Stocks with High Upside Potential, we used a screener to find software stocks. We chose the stocks which have increased significantly over the past 6 months, and that analysts still see upside to. Finally, the stocks were arranged in ascending order of their average upside potential, as of February 14. We also mentioned the hedge fund sentiment around each stock, as of Q3 2024.
At Insider Monkey we are obsessed with 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10 Hot Software Stocks with High Upside Potential
10) PowerFleet, Inc. (NASDAQ:AIOT)
% Gain Over Past 6 Months: ~64.9%
Average Upside Potential: ~35.8%
Number of Hedge Fund Holders: 16
PowerFleet, Inc. (NASDAQ:AIOT) offers Internet-of-Things SaaS solutions in the United States, Israel, and internationally. Lake Street upped the company’s price target to $11 from $7, keeping a “Buy” rating. The firm was pleased with the healthy top-line momentum and progress witnessed in the cost synergies in fiscal Q3. Elsewhere, Roth MKM believes that following the Fleet Complete acquisition, new logos and upsell opportunities with Unity, warehouse, and AI cameras offer visibility for 10%-plus annual SaaS and more direct comparisons to Samsara Inc. (NYSE:IOT).
Since the comparisons to Samsara have been becoming more relevant, Roth MKM expects a strong upside to PowerFleet, Inc. (NASDAQ:AIOT)’s shares. The firm has a “Buy” rating with a price objective of $13. On the commercial front, the Fleet Complete acquisition has expanded the company’s market opportunity via scaled channel partnerships with leading telecommunications providers.
PowerFleet, Inc. (NASDAQ:AIOT)’s direct sales efforts are fueling high-value wins, which include a major Unity in-warehouse safety solution deal with one of the leading beverage companies in North America, with long-term total contract value revenue potential ranging between $25 million – $30 million. Furthermore, while announcing Q3 2025 financial results, PowerFleet, Inc. (NASDAQ:AIOT) highlighted that AI camera solutions are gaining strong traction, with sales volumes rising 52% YoY through its largest channel partner.
9) Rumble Inc. (NASDAQ:RUM)
% Gain Over Past 6 Months: ~79.7%
Average Upside Potential: ~43.2%
Number of Hedge Fund Holders: 6
Rumble Inc. (NASDAQ:RUM) operates video-sharing platforms in the US, Canada, and internationally. Maxim Group initiated coverage on its shares, providing a price target of $20 and a “Buy” rating. The analyst at the firm opines that as a result of strong user growth, Rumble Inc. (NASDAQ:RUM) has been a strong contender in the video space. Notably, the company saw average global monthly active users of 67 million in Q3 2024 as compared to 53 million in Q2 2024, representing the 11th consecutive quarter above 40 million average global MAUs on the platform.
In another positive development, Rumble Inc. (NASDAQ:RUM) announced that US President Donald Trump has established an official White House channel on the platform. It can significantly increase its visibility and user base. Rumble Inc. (NASDAQ:RUM) continues to expect revenue growth for the remainder of 2024. As the company ramps up monetization and maintains discipline around its cost structure, it expects to move materially towards adjusted EBITDA breakeven in 2025.
The increase in AI-driven recommendation algorithms can improve the company’s user experience. Furthermore, advances in machine learning and personalization enable platforms to match content with users, resulting in higher engagement and ad revenue. Overall, the growth of the software industry in AI, streaming technologies, and cloud will improve Rumble Inc. (NASDAQ:RUM)’s scalability, user engagement, and monetization, placing it well to capitalize on the opportunities provided by the software industry.
8) Bitdeer Technologies Group (NASDAQ:BTDR)
% Gain Over Past 6 Months: ~139.4%
Average Upside Potential: ~45.4%
Number of Hedge Fund Holders: 19
Bitdeer Technologies Group (NASDAQ:BTDR) operates as a technology company for blockchain and computing. The company manages mining pools, which need custom software for the distribution of mining rewards and coordination of computing power among participants. Rosenblatt analyst Kevin Cassidy upped the company’s price target to $30 from $22, keeping a “Buy” rating. As per the firm, Bitdeer Technologies Group (NASDAQ:BTDR) has a stable strategy for transitioning itself into the world’s largest vertically integrated Bitcoin miner. Furthermore, there remains a great potential for the company to diversify into AI.
Elsewhere, Benchmark analysts are also optimistic about the company’s growth prospects due to the expansion of a three-pronged platform, including Bitcoin mining, operation and construction of AI/HPC data centers, and development of ASIC Bitcoin mining rigs. Bitdeer Technologies Group (NASDAQ:BTDR)’s focus on constructing and operating AI/HPC data centers, together with the development of specialized ASIC Bitcoin mining rigs, exhibits the company’s integrated approach, which focuses on capitalizing on the dynamic digital currency landscape. The software industry’s advancements in AI-driven optimization, energy-efficient algorithms, and predictive maintenance can improve the efficiency of Bitcoin mining.
Through controlling the entire value chain, right from chip design to mining operations, Bitdeer Technologies Group (NASDAQ:BTDR) can optimize efficiency at each stage of the process. With continuous improvements in the software industry, the demand for HPC and blockchain infrastructure can increase, fueling growth for the company.
