Enterprise software comprises applications designed for large organizations, which enable them to manage functions like data analysis, sales, marketing, and customer service. These solutions prioritize scalability, high user capacity, and seamless integration with existing systems. Grand View Research reported that the global enterprise software market is valued at $263.79 billion as of 2024 and is expected to expand at a 12.1% compound annual growth rate from 2025 to 2030. North America accounted for 41% market share of the global enterprise software industry in 2024.
Key trends such as Industry 4.0, digitization, and the rise of connected devices add to the demand for automated and integrated solutions. The shift towards hybrid work models has increased enterprise software adoption in sectors like healthcare and education. In healthcare, enterprise software enhances hospital management and electronic health records. Data safety and privacy are vital market drivers as organizations prioritize protecting sensitive information and comply with GDPR and HIPAA regulations.
Cloud-based enterprise software is expected to dominate the market share by over 55% in 2024 due to its accessibility and affordability, while on-premise solutions will gain traction as organizations seek enhanced customization and data security. Large enterprises accounted for over 62% of the market share, driven by the need to manage complex workflows efficiently. The IT & Telecom sector led with over 20% market share in 2024.
On December 11, Liz Young Thomas, SoFi’s head of investment strategy, and Angela Mwanza, Rockefeller Global Family Office private advisor, joined CNBC’s ‘Closing Bell’ to discuss their market outlooks and address the recent performance of tech stocks. Mwanza expressed a strong bullish outlook for the software sector as they approach the new year. She noted that while mega-cap tech stocks are highly valued, this does not indicate that they are overvalued. She suggested rebalancing portfolios to reduce concentration in these large-cap names while recognizing their growth potential. She highlighted that over the last 6 months, the MAG7 stocks have lagged behind the broader S&P 500, indicating a market broadening that could favor software investments.
Thomas supported this bullish sentiment by emphasizing the resilience of software stocks amid recent volatility in momentum stocks, particularly high-growth names. Despite some mega-cap stocks seeing dramatic year-to-date increases, some up to 900%, others have struggled. Looking into 2025, Thomas predicted uneven performance within the tech landscape and advised investors to focus on software companies. She expressed a stronger bullish sentiment towards this segment, suggesting that software stocks are well-positioned for continued growth as they head into the new year.
With that, we’re here with a list of the 11 best enterprise software stocks to invest in.
Methodology
We first sifted through ETFs, online rankings, and internet lists to compile a list of the top enterprise software stocks. We then selected the 11 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q3 2024. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 900 elite money managers.
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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
11 Best Enterprise Software Stocks to Invest In
11. HubSpot Inc. (NYSE:HUBS)
Number of Hedge Fund Holders: 63
HubSpot Inc. (NYSE:HUBS) provides customer relationship management (CRM) software and empowers businesses to attract, engage, and delight customers. Its platform offers tools for sales, marketing, and customer service. Some of its features include AI-powered marketing automation, an app marketplace, and a community of users and partners.
Its growth is significantly driven by the rapid adoption of its AI-powered platform. Q3 2024 saw strong revenue growth of 20% year-over-year in constant currency, building upon 2023’s robust performance of 25.4% revenue growth. The recently launched Breeze platform, the company’s AI engine, encompasses Copilot, AI Agents, new features, and an agent marketplace.
AI awareness increased by 13% quarter-over-quarter, with a portion of enterprise and Pro customers actively engaging with AI features. Copilot, the AI assistant, has a 43% repeat usage rate, demonstrating early adoption among startups. The Customer Agent has empowered 25-30% of Kaplan’s customers to self-serve, leading to a 30% reduction in average ticket response time. The Content Agent has enabled Morehouse College to increase page views by 30% and improve time spent on the site by 27%.
These AI-powered solutions are empowering businesses to enhance efficiency, improve customer satisfaction, and drive revenue growth, solidifying HubSpot Inc.’s (NYSE:HUBS) position as the leading customer platform.
Artisan Mid Cap Fund stated the following regarding HubSpot, Inc. (NYSE:HUBS) in its Q3 2024 investor letter:
“Along with Dexcom and Celsius, a notable trim in the quarter wasHubSpot, Inc. (NYSE:HUBS). HubSpot is a leading cloud-based customer relationship management software provider for small-to-medium businesses. The stock was a top performer in 2023 as it meaningfully improved its profitability after several years of heavy investment. However, as we mentioned earlier in this letter, the environment for cloud software providers has been challenging in 2024 as macroeconomic pressures have impacted customer spending. Our long-term conviction remains intact, but we reduced the position due to near-term uncertainty. Meanwhile, we are encouraged by the company’s efforts to leverage AI advances to help internally (e.g., more efficient software development) and externally (e.g., new agent-based apps to help customers extract more value out of its products).”
10. Datadog Inc. (NASDAQ:DDOG)
Number of Hedge Fund Holders: 71
Datadog Inc. (NASDAQ:DDOG) provides observability and security platforms for cloud applications. Its SaaS platform integrates and automates functionalities like infrastructure monitoring, application performance monitoring, log management, and real-user monitoring. This unified approach provides businesses with real-time insights into their entire technology stack, helping them identify and address potential issues proactively.
AI Native Customers, who heavily leverage AI/ML, now represent over 6% of the company’s ARR, an increase from 2.5% a year ago. These customers contributed ~4 percentage points to Datadog Inc.’s (NASDAQ:DDOG) year-over-year revenue growth in Q3 2024, which was 26%. 3,000+ customers are currently utilizing Datadog AI integrations, and 100s are actively using LLM Observability, which provides visibility into the performance and behavior of LLMs.
This underscores the increasing importance of AI within the Datadog Inc. (NASDAQ:DDOG) ecosystem and the company’s commitment to providing comprehensive observability solutions for AI-powered applications.
The Brown Capital Management Small Company Fund stated the following regarding Datadog, Inc. (NASDAQ:DDOG) in its Q3 2024 investor letter:
“Other examples of negative sentiment include portfolio companies that reported earnings that met or exceeded expectations, but only saw their share prices go up slightly, stay flat or even decline. For example, Datadog, Inc. (NASDAQ:DDOG) is a leading SaaS-based, information technology (IT)-monitoring and analytics software platform for developers, IT operations and business users. The platform automates the monitoring of infrastructure, applications databases, networks, logs and security. Datadog’s platform is differentiated by providing a unified view of these systems via a visual interface configured to the needs of each user (i.e., a single pane of glass). Datadog delivered solid operating results in the second quarter of 2024, reporting revenue growth of 27% and raising 2024 full year revenue, operating income and earnings guidance. Despite these solid fundamental results, Datadog’s share price was down 11.8% in the third quarter. We speculate that these market reactions are evidence of the negative environment for high-growth companies. For more, please see the Detractors section below.
Datadog, mentioned above, automates the monitoring of infrastructure, applications databases, networks, logs and security. The company delivered solid operating results in the second quarter of 2024, reporting revenue growth of 27% and raising guidance for 2024 full-year revenue, operating income and earnings. Datadog noted improving consumption and demand trends among its enterprise customers and stabilizing trends among its small and mid-sized customers. On its earnings call, Datadog management disputed that it has interest in large acquisitions, notwithstanding news articles on July 17 that Gitlab was seeking a buyer and Datadog is among the potential suitors. Despite solid fundamental results, Datadog’s share price underperformed in the third quarter of 2024. This may be due to its premium valuation and investor worries about Datadog’s ability to sustain its current strong revenue growth in a softer economic environment. We remain confident in Datadog’s ability to deliver durable growth over the long term. We believe Datadog has a massive and underpenetrated total addressable market that is growing about 10% annually. We also believe Datadog has a strong competitive positioning in infrastructure monitoring and is gaining market share.”
9. Snowflake Inc. (NYSE:SNOW)
Number of Hedge Fund Holders: 71
Snowflake Inc. (NYSE:SNOW) is a data warehousing company. Its core offering is the Data Cloud, a global network that empowers organizations to mobilize their data with unparalleled scale, speed, and performance. This platform provides a range of data-driven solutions that facilitate collaboration and address critical needs in areas such as cybersecurity and application development.
The company’s core strength lies in its position as the easiest and most cost-effective enterprise data platform, which is driving significant customer adoption. For example, Snowpark, which simplifies data engineering, is already contributing roughly 3% to the revenue and has led to customers reporting 50% cost savings when migrating from competitors. This competitive advantage is evident in its strong FQ3 2025 results, where product revenue reached $900 million, up 29% year-over-year, while remaining performance obligations grew 55%.
With ongoing product innovation, strategic partnerships, and a focus on customer success, Snowflake Inc. (NYSE:SNOW) is well-positioned to capitalize on the evolving data landscape and solidify its position in the relevant market.
8. Crowdstrike Holdings Inc. (NASDAQ:CRWD)
Number of Hedge Fund Holders: 74
Crowdstrike Holdings Inc. (NASDAQ:CRWD) is a cybersecurity company that provides cloud-delivered endpoint protection and threat intelligence solutions. Its flagship product, the Falcon platform, uses AI and ML to detect and prevent cyberattacks across endpoints, cloud workloads, and identities.
The Falcon platform’s innovative subscription model, Falcon Flex, is accelerating platform adoption. With 150+ Falcon Flex deals in FQ3 2025, representing over $1.3 billion in total deal value, customers are increasingly consolidating their security stack onto the Falcon platform. This model has contributed to 29% year-over-year revenue growth and 31% year-over-year subscription revenue growth.
Falcon Flex also increases customer spending and enhances customer stickiness. The average Flex customer spends multi-millions, significantly higher than the average Crowdstrike Holdings Inc. (NASDAQ:CRWD) customer. Together these factors position the company to return sizeable shareholder value.
Fidelity Growth Strategies Fund stated the following regarding CrowdStrike Holdings, Inc. (NASDAQ:CRWD) in its Q3 2024 investor letter:
“A non-benchmark stake in CrowdStrike Holdings, Inc. (NASDAQ:CRWD) (-40%) was the biggest detractor among individual stocks. The shares of this cybersecurity platform provider fell precipitously in July, after a glitch in a CrowdStrike software update led to a global outage for many of its customers that, among other impacts, caused the mass cancellation of flights around the world. After bottoming out in early August, the stock made a partial rebound by quarter end, but we exited the fund’s holding during the summer.”
7. ServiceNow Inc. (NYSE:NOW)
Number of Hedge Fund Holders: 78
ServiceNow Inc. (NYSE:NOW) provides cloud-based workflow automation software. Its Now Platform empowers organizations to streamline and automate their business processes, improve operational efficiency, and enhance customer experiences through the use of AI.
18 of the top 20 deals in Q3 2024 included seven or more products from within the Now Platform. With its help, customers can streamline processes, improve efficiency, and gain insights through a single source of truth. The company is experiencing strong momentum in large deal activity with 96 deals exceeding $1 million in net new Annual Contract Value (ACV) in Q3. Furthermore, 15 deals surpassed $5 million, and six deals exceeded $10 million.
The adoption of AI-powered solutions, coupled with the launch of Xanadu, the company’s biggest GenAI release to date, is driving revenue growth, with subscription revenue growing 22.5% year-over-year at constant currency and RPO reaching 23.5% year-over-year at constant currency.
As customers continue to recognize the platform’s ability to streamline operations, improve efficiency, and drive business growth, ServiceNow Inc. (NYSE:NOW) is well-positioned for continued success in the dynamic and evolving market for workflow automation solutions.
Polen Focus Growth Strategy stated the following regarding ServiceNow, Inc. (NYSE:NOW) in its Q3 2024 investor letter:
“In the third quarter, the top relative contributors to the Portfolio’s performance were NVIDIA (not owned), Shopify, and ServiceNow, Inc. (NYSE:NOW). ServiceNow reported better-than-expected sales and bookings during the quarter, with subscription sales up +23%. Encouragingly, GenAI offerings within its product suite, rolled out in late 2023, already appear to be an incremental driver of this growth. In our view, ServiceNow is a great example of a consistent grower, with a strong moat serving diverse and growing end markets with expanding margin opportunities over time.”
6. Workday Inc. (NASDAQ:WDAY)
Number of Hedge Fund Holders: 84
Workday Inc. (NASDAQ:WDAY) provides cloud-based enterprise applications and specializes in human capital management (HCM) and financial management solutions. Its cloud-based platform offers applications for various HR functions, such as talent acquisition, performance management, and payroll, as well as financial functions, including financial planning and analysis, accounting, and procurement.
Over 30% of customer expansions in the company in FQ3 2025 involved AI. For instance, Recruiter Agent, a task-automating agent, saw a massive quarter with new logo closures surpassing any previous quarter in its 12-year history. It’s boosting the average selling price of core recruiting solutions by almost 150%. Talent Optimization experienced up to a 39% reduction in turnover. Workday Assistant, the AI-powered copilot, is being used by over 2,000 HCM customers, improving efficiency and reducing HR case volumes by nearly 30%.
This AI-driven growth contributed to 16% subscription revenue growth and 16% total revenue growth in Q3. This demonstrates the impact of AI across various aspects of Workday Inc.’s (NASDAQ:WDAY) business, highlighting key products and customer successes. It positions AI as the primary driver of growth for the company.
Polen Focus Growth Strategy stated the following regarding Workday, Inc. (NASDAQ:WDAY) in its Q3 2024 investor letter:
“We added to several existing positions in the quarter including Adobe, Workday, Inc. (NASDAQ:WDAY), Shopify, MSCI, and Paycom Software. Workday is still growing revenue at a mid-to-high-teens rate, but in recent years, slower macroeconomic growth has made closing deals more challenging. Amidst a pullback, we increased our position as we found the valuation attractive for a well-positioned, recurring revenue business with still strong growth potential. The company also recently stated publicly that it will be focused on expanding profit margins meaningfully over the next five years—something we have expected and are pleased to see.”
5. Intuit Inc. (NASDAQ:INTU)
Number of Hedge Fund Holders: 87
Intuit Inc. (NASDAQ:INTU) is a global financial technology platform that empowers individuals and businesses to achieve their financial goals. Its products include TurboTax for tax preparation, Credit Karma for financial management, QuickBooks for business accounting, and Mailchimp for email marketing.
In FQ1 2025, revenue increased by 10%, driven by a 20% surge in the Global Business Solutions Group’s online ecosystem revenue. This growth is directly attributable to AI-powered innovations like Intuit Assist, the company’s AI-powered financial assistant. Intuit Assist automates critical tasks such as invoice creation, cash flow analysis, and bill payment, resulting in a 45% improvement in customer efficiency.
The company is expanding its reach into the $89 billion mid-market with Intuit Enterprise Suite (IES), which leverages AI agents to enhance productivity and deliver valuable insights. Driven by this continued expansion, Intuit Inc. (NASDAQ:INTU) remains confident in achieving double-digit revenue growth and margin expansion this year.
Parnassus Growth Equity Fund stated the following regarding Intuit Inc. (NASDAQ:INTU) in its Q3 2024 investor letter:
“Intuit Inc. (NASDAQ:INTU) shares fell despite the financial software company posting strong quarterly results. The company’s pricing-dependent long-term guidance concerned investors. However, we continue to believe Intuit’s customer growth and relevant platform will sustain its wide moat and long growth runway.”
4. Oracle Corp. (NYSE:ORCL)
Number of Hedge Fund Holders: 91
Oracle Corp. (NYSE:ORCL) is a software provider that offers comprehensive cloud solutions through Oracle Cloud Infrastructure (OCI), which provides a suite of cloud services, including computing, storage, and networking capabilities. Furthermore, its Roving Edge Infrastructure extends cloud capabilities to remote locations, enabling real-time data processing and analysis in limited connectivity.
Cloud services and license support segment encompass a range of offerings, including cloud computing services like Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS), as well as the ongoing support and maintenance services associated with the company’s software licenses.
Cloud services, particularly within OCI, grew due to the increasing demand for AI workloads, the company’s competitive pricing and performance advantages, and the flexibility offered by its diverse deployment options. License support plays a vital role in ensuring the smooth and uninterrupted operation of Oracle software for customers.
In FQ2 2025, this segment generated $10.8 billion in revenue, reflecting a 12% year-over-year increase. This made up 77% of the total revenue generated in this quarter. This integrated approach enables Oracle Corp. (NYSE:ORCL) to meet the diverse needs of its customers, from providing cutting-edge cloud solutions to ensuring the seamless operation of their existing software investments.
Parnassus Value Equity Fund stated the following regarding Oracle Corporation (NYSE:ORCL) in its Q3 2024 investor letter:
“Oracle Corporation (NYSE:ORCL) announced second-quarter results that exceeded consensus expectations, driven by growth in its cloud infrastructure business, which is benefiting from demand for AI applications. Investor sentiment was further bolstered by the company’s announcement of a new partnership with Amazon.”
3. Salesforce Inc. (NYSE:CRM)
Number of Hedge Fund Holders: 116
Salesforce Inc. (NYSE:CRM) provides software to help businesses manage their customer relationships. It is primarily known for its AI-powered CRM (customer relationship management) platform, which is used by over 150,000 companies worldwide.
Its primary growth driver is Agentforce, an AI-powered platform for digital labor. Agentforce uses autonomous AI agents to amplify human capabilities, reshaping how businesses operate. In FQ3 2025, the company closed 200+ Agentforce deals, demonstrating strong market demand. Major companies like FedEx, Adecco, Accenture, ACE Hardware, IBM, and RBC Wealth Management are actively building their digital labor forces on the Salesforce Inc. (NYSE:CRM) platform with Agentforce.
The company expects Agentforce to deflect between a quarter and a half of its annual case volume, with optimistic cases potentially seeing much higher deflections. Salesforce Inc. (NYSE:CRM) is hiring 1,400 AEs globally in FQ4. The ecosystem is thriving with 80,000+ system integrators trained on Agentforce and hundreds of ISVs and technology partners building and selling agents. Hence, the company emphasizes responsible AI development and positions itself as the leader in the enterprise AI platform space.
2. Adobe Inc. (NASDAQ:ADBE)
Number of Hedge Fund Holders: 123
Adobe Inc. (NASDAQ:ADBE) is a software company that provides a range of creative, marketing, and document management solutions. Its product portfolio includes well-known industry-standard tools such as Photoshop, Illustrator, InDesign, Acrobat, and Premiere Pro, utilized by millions of professionals worldwide.
In 2024, the company focused on integrating GenAI in its offerings. It introduced AI models like Firefly, with capabilities spanning image, vector, design, and video generation, revolutionizing creative workflows. This innovation is deeply integrated into flagship applications like Photoshop, Premiere Pro, and Acrobat. Resultantly, Adobe Inc. (NASDAQ:ADBE) surpassed $2 billion in net new Digital Media ARR for the first time. This was further solidified by the Digital Experience business exceeding $5 billion in revenue, driven by the success of Adobe Experience Platform and native apps, which leverage AI too.
The surge in AI-powered creativity contributed to a record revenue of $21.51 billion in fiscal year 2024, representing an 11% year-over-year growth. The company’s continued investment in AI innovation, positions Adobe Inc. (NASDAQ:ADBE) for continued success in the years to come.
1. Microsoft Corp. (NASDAQ:MSFT)
Number of Hedge Fund Holders: 279
Microsoft Corp. (NASDAQ:MSFT) is a tech company known for its transformative technologies. It has recently made strides in the AI domain. In November, the company unveiled a suite of enhanced AI models tailored to diverse industry needs, expanding its offerings through the Azure AI model catalog.
In FQ1 2025, the company reported a revenue of $65.6 billion, recording a 16% year-over-year increase. This growth was driven by a record-breaking quarterly revenue of $38.9 billion from its cloud services, representing a 22% year-over-year surge. Notably, the Azure segment achieved an impressive 33% revenue growth, fueled by a surge in demand for AI-powered solutions within its cloud offerings.
These developments underscore the efficacy of Microsoft’s strategy in leveraging AI to drive business success. The company has articulated its vision to establish three trusted platforms, strategically designed to maximize the value of AI for businesses, demonstrating its commitment to integrating AI into core business operations. Microsoft Corp. (NASDAQ:MSFT) is well-positioned to capitalize on the burgeoning demand for AI solutions across various sectors, solidifying its leadership position within the technology industry.
RiverPark Large Growth Fund stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its Q3 2024 investor letter:
“Microsoft Corporation (NASDAQ:MSFT): MSFT was a top detractor in the third quarter following a fiscal fourth quarter earnings report that featured inline operating metrics but mixed guidance. Positively, the company reported strong revenue (+15%) and earnings growth (+10%), powered by Azure (+30%), and operating margins of 43%. Guidance however calls for lower than expected fiscal first quarter Azure revenue as infrastructure constraints limit growth, and higher capital expenditures throughout the company’s fiscal 2025 to alleviate these constraints. The company expects growth to reaccelerate in the back half of fiscal 2025 as more AI capacity comes online.
Cloud-based services have become the company’s largest revenue and earnings producer. The company’s Azure platform alone has the potential to grow to more than $200 billion in annual revenue over the next decade. Overall, we believe that the company will continue to deliver double-digit revenue and EPS growth and generate an enormous amount of free cash flow to return to shareholders and use for acquisitions.”
While we acknowledge the growth potential of Microsoft Corp. (NASDAQ:MSFT), our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter timeframe. 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.
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