14 Best Software Stocks To Buy According To Hedge Funds

Published on February 28, 2024 at 4:34 am by Fatima Farooq in Hedge Funds, News

In this article, we will be taking a look at the 14 best software stocks to buy according to hedge funds. To skip our detailed analysis of the tech sector, you can go directly to see the 5 Best Software Stocks To Buy According To Hedge Funds.

AI is Revolutionizing the Software Industry

News in the technology industry has long been dominated by talks of artificial intelligence and semiconductors. Considering this, it’s unsurprising that application software and software infrastructure companies are also beginning to be pulled into the craze surrounding AI and semiconductors, so much so that enterprise software companies may very well become revolutionized by artificial intelligence and drive up demand for semiconductor companies and their technology. With the growing use of artificial intelligence by software companies, not only can these companies expect to see greater innovation in their work processes, leading to perhaps higher profitability for themselves in the long run, but also, users of their software products can expect to benefit from the integration of artificial intelligence in software tools and products, making these much more accessible to every other user.

On February 21, NVIDIA Corporation’s (NASDAQ:NVDA) CEO, Jensen Huang, joined CNBC’s “Last Call” to discuss this possibility. Here are some of his comments from the call:

“What’s gonna happen is this: the world’s enterprise software platforms represent approximately a trillion dollars. These trillion dollars represent most platforms, like ServiceNow, it represents data platforms like Snowflake, Dropbox, Box, SAP, Oracle. These application oriented, tools oriented platforms and data oriented platforms are all going to be revolutionized with these AI agents that sit on top of it. And the way to think about that is very simple. Whereas these platforms used to be tools that experts would learn to use, in the future, these tools companies will also offer AI agents that you can hire to help you use these tools, or to help you reduce the barrier of using these tools.”

The AI Craze: Hype or Reality?

Gene Munster, the Managing Partner at Deepwater Asset Management, also joined CNBC’s “Last Call” on February 21 to discuss the application of AI in enterprise software. Here are some of his comments:

“There is already an infrastructural layer that’s in place, it’s still nascent, but there is a lot of use for some of the things that Jensen Huang was just talking about… they are actually using AI. And that is in incredible numbers. I said I expected it to be 5%, but 40% does show that even though this is early, we’re getting a lot of use from AI. I guess this really speaks to the question of AI, how much is it hype, how much is it reality? This looks to be more than just a guess from the big tech companies, that it’s gonna be something that people are actually using.”

Considering the above, investors are beginning to gravitate not just towards pure artificial intelligence plays in the market, but also software companies that may be making use of AI to enhance their products and services. As such, we have compiled a list of some of the best software stocks to buy now, such as Microsoft Corporation (NASDAQ:MSFT), salesforce.com, inc. (NYSE:CRM), and Uber Technologies, Inc. (NYSE:UBER). Our list includes some of the best software stocks to invest in for the long term, alongside some of the best AI software stocks as well.

An engineer wearing virtual reality goggles programming the company’s video cloud and software.

Our Methodology

To compile our list of the best software stocks to buy according to hedge funds, we consulted Insider Monkey’s hedge fund data for the fourth quarter. The stocks were shortlisted and ranked based on the number of hedge funds holding stakes in them, from the lowest to the highest number. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.

Best Software Stocks To Buy According To Hedge Funds

14. CrowdStrike Holdings, Inc. (NASDAQ:CRWD)

Number of Hedge Fund Holders: 62

CrowdStrike Holdings, Inc. (NASDAQ:CRWD) is a systems software company. It provides cloud-delivered protection across endpoints and cloud workloads, identity, and data.

Guggenheim analyst John Difucci maintained a Buy rating and a $358 price target on CrowdStrike Holdings, Inc. (NASDAQ:CRWD) this February.

There were 62 hedge funds long CrowdStrike Holdings, Inc. (NASDAQ:CRWD) in the fourth quarter, with a total stake value of $2.6 billion.

Baron Funds mentioned CrowdStrike Holdings, Inc. (NASDAQ:CRWD) in its fourth-quarter 2023 investor letter:

“Improving unit economics: Many of our companies were able to significantly expand margins during 2023 even though revenue growth decelerated for some of them, showcasing the power of their capital-light, recurring revenue business models, and their increased focus on efficiency. Another example is the cybersecurity platform, CrowdStrike Holdings, Inc. (NASDAQ:CRWD), which is expected to increase its operating margins from 15.9% in 2022 to 20.8% in 2023 as a result of growing efficiencies, while the company’s platform offering is resonating with an increasing number of customers (for example, deals with eight or more modules grew 78% year-over-year in the last quarter), which is a tailwind to sales productivity.”

13. Synopsys, Inc. (NASDAQ:SNPS)

Number of Hedge Fund Holders: 66

In the fourth quarter, 66 hedge funds were long Synopsys, Inc. (NASDAQ:SNPS) with a total stake value of $3.2 billion.

Synopsys, Inc. (NASDAQ:SNPS) is an application software company. It provides electronic design automation software products used to design and test integrated circuits.

Joe Vruwink at Baird maintained an Outperform rating and a $640 price target on Synopsys, Inc. (NASDAQ:SNPS) this February.

Carillon Tower Advisers mentioned Synopsys, Inc. (NASDAQ:SNPS) in its fourth-quarter 2023 investor letter:

“Synopsys, Inc. (NASDAQ:SNPS) provides software for the development of semiconductors. Investors have appreciated the continued strength in demand from major semiconductor companies and the company’s new product announcements leveraging artificial intelligence.”

12. Splunk Inc. (NASDAQ:SPLK)

Number of Hedge Fund Holders: 68

Based in San Francisco, California, Splunk Inc. (NASDAQ:SPLK) is an application software company. The company develops and markets cloud services and licensed software solutions in the US and internationally.

Splunk Inc. (NASDAQ:SPLK) was seen in the portfolios of 68 hedge funds in the fourth quarter, with a total stake value of $3.9 billion.

ClearBridge Investments mentioned Splunk Inc. (NASDAQ:SPLK) in its third-quarter 2023 investor letter:

“Stock selection in the IT sector was the main detractor during the quarter, as the prospect of a higher-for-longer rate environment weighed on longer-duration, higher growth stocks. Despite these challenges, there were also strong positive contributions from Splunk Inc. (NASDAQ:SPLK) and AppLovin. Splunk’s price rallied on the news of its acquisition by Cisco, and investors applauded AppLovin’s new, AI-enabled platform which is improving productivity in its mobile games ad network.”

Like Microsoft Corporation (NASDAQ:MSFT), salesforce.com, inc. (NYSE:CRM), and Uber Technologies, Inc. (NYSE:UBER), Splunk Inc. (NASDAQ:SPLK) is one of the best software stocks to buy now.

11. Datadog, Inc. (NASDAQ:DDOG)

Number of Hedge Fund Holders: 72

Datadog, Inc. (NASDAQ:DDOG) is another application software company on our list of the best software stocks to buy. It operates an observability and security platform for cloud applications in North America and internationally.

RBC Capital’s Matthew Hedberg reiterated an Outperform rating on Datadog, Inc. (NASDAQ:DDOG) on February 16, alongside a $151 price target.

There were 72 hedge funds long Datadog, Inc. (NASDAQ:DDOG) in the fourth quarter, with a total stake value of $2.4 billion.

10. Cadence Design Systems, Inc. (NASDAQ:CDNS)

Number of Hedge Fund Holders: 72

We saw 72 hedge funds long Cadence Design Systems, Inc. (NASDAQ:CDNS) in the fourth quarter, with a total stake value of $3.6 billion.

Cadence Design Systems, Inc. (NASDAQ:CDNS) is a provider of software, hardware, and reusable integrated circuit design blocks worldwide. It is based in San Jose, California.

On February 14, Morgan Stanley’s Lee Simpson placed an Overweight rating on Cadence Design Systems, Inc. (NASDAQ:CDNS) alongside a $350 price target.

9. Intuit Inc. (NASDAQ:INTU)

Number of Hedge Fund Holders: 75

Michael Turrin at Wells Fargo holds an Overweight rating and a $710 price target on Intuit Inc. (NASDAQ:INTU) as of February 21.

Intuit Inc. (NASDAQ:INTU) is a provider of financial management and compliance products and services operating in the application software industry. It is based in Mountain View, California.

In total, 75 hedge funds were long Intuit Inc. (NASDAQ:INTU) in the fourth quarter. Their total stake value was $6.9 billion.

Fisher Asset Management was the most prominent shareholder in Intuit Inc. (NASDAQ:INTU) at the end of the fourth quarter, holding 3.1 million shares in the company.

8. Palo Alto Networks, Inc. (NYSE:PANW)

Number of Hedge Fund Holders: 77

Holding 3.1 million shares in the company, Citadel Investment Group was the largest shareholder in Palo Alto Networks, Inc. (NYSE:PANW) at the end of the fourth quarter.

Palo Alto Networks, Inc. (NYSE:PANW) is a systems software company based in Santa Clara, California. It provides cybersecurity solutions such as firewall appliances and software.

Keybanc’s Michael Turits holds an Overweight rating and a $380 price target on Palo Alto Networks, Inc. (NYSE:PANW) as of February 21.

Palo Alto Networks, Inc. (NYSE:PANW) had 77 hedge funds long its stock in the fourth quarter. Their total stake value was $1.8 billion.

Here’s what TimesSquare Capital Management said about Palo Alto Networks, Inc. (NYSE:PANW) in its third-quarter 2023 investor letter:

“Across the Information Technology universe, we seek companies possessing differentiated capabilities, products, and services. Palo Alto Networks, Inc. (NASDAQ:PANW) supplies network and cloud-based security solutions to enterprises, service providers, and government entities. The latest quarter was mixed with the company falling shy versus the Street on billings, in line for revenues, and outpacing earnings. Palo Alto’s updated guidance was materially ahead of lowered Street expectations. Nevertheless, its shares pulled back by -8%.”

7. Workday, Inc. (NYSE:WDAY)

Number of Hedge Fund Holders: 81

Our hedge fund data for the fourth quarter shows 81 hedge funds long Workday, Inc. (NYSE:WDAY), with a total stake value of $5.4 billion.

Workday, Inc. (NYSE:WDAY) is an application software company that provides enterprise cloud applications. It is based in Pleasanton, California.

Wells Fargo’s Michael Turrin maintained an Overweight rating and a $350 price target on Workday, Inc. (NYSE:WDAY) on February 20.

Like Microsoft Corporation (NASDAQ:MSFT), salesforce.com, inc. (NYSE:CRM), and Uber Technologies, Inc. (NYSE:UBER), Workday, Inc. (NYSE:WDAY) is among the best software stocks to buy now.

6. Snowflake Inc. (NYSE:SNOW)

Number of Hedge Fund Holders: 86

Altimeter Capital Management was the most prominent shareholder in Snowflake Inc. (NYSE:SNOW) at the end of the fourth quarter, holding 12.4 million shares in the company.

On February 21, Needham’s Mike Cikos maintained a Buy rating and a $265 price target on Snowflake Inc. (NYSE:SNOW).

Snowflake Inc. (NYSE:SNOW) is an internet services and software infrastructure company based in Bozeman, Montana. The company provides a cloud-based data platform.

A total of 86 hedge funds were long Snowflake Inc. (NYSE:SNOW) in the fourth quarter. Their total stake value was $7 billion.

Altimeter Capital Management was the most prominent shareholder in Snowflake Inc. (NYSE:SNOW) at the end of the fourth quarter, holding 12.4 million shares in the company.

Click to continue reading and see 5 Best Software Stocks To Buy According To Hedge Funds.

AI Fire Sale: Insider Monkey’s #1 AI Stock Pick Is On A Steep Discount

Published on October 30, 2024 at by Inan Dogan, PhD

Artificial intelligence is the greatest investment opportunity of our lifetime. The time to invest in groundbreaking AI is now, and this stock is a steal!

The whispers are turning into roars.

Artificial intelligence isn’t science fiction anymore.

It’s the revolution reshaping every industry on the planet.

From driverless cars to medical breakthroughs, AI is on the cusp of a global explosion, and savvy investors stand to reap the rewards.

Here’s why this is the prime moment to jump on the AI bandwagon:

Exponential Growth on the Horizon: Forget linear growth – AI is poised for a hockey stick trajectory.

Imagine every sector, from healthcare to finance, infused with superhuman intelligence.

We’re talking disease prediction, hyper-personalized marketing, and automated logistics that streamline everything.

This isn’t a maybe – it’s an inevitability.

Early investors will be the ones positioned to ride the wave of this technological tsunami.

Ground Floor Opportunity: Remember the early days of the internet?

Those who saw the potential of tech giants back then are sitting pretty today.

AI is at a similar inflection point.

We’re not talking about established players – we’re talking about nimble startups with groundbreaking ideas and the potential to become the next Google or Amazon.

This is your chance to get in before the rockets take off!

Disruption is the New Name of the Game: Let’s face it, complacency breeds stagnation.

AI is the ultimate disruptor, and it’s shaking the foundations of traditional industries.

The companies that embrace AI will thrive, while the dinosaurs clinging to outdated methods will be left in the dust.

As an investor, you want to be on the side of the winners, and AI is the winning ticket.

The Talent Pool is Overflowing: The world’s brightest minds are flocking to AI.

From computer scientists to mathematicians, the next generation of innovators is pouring its energy into this field.

This influx of talent guarantees a constant stream of groundbreaking ideas and rapid advancements.

By investing in AI, you’re essentially backing the future.

The future is powered by artificial intelligence, and the time to invest is NOW.

Don’t be a spectator in this technological revolution.

Dive into the AI gold rush and watch your portfolio soar alongside the brightest minds of our generation.

This isn’t just about making money – it’s about being part of the future.

So, buckle up and get ready for the ride of your investment life!

Act Now and Unlock a Potential 10,000% Return: This AI Stock is a Diamond in the Rough (But Our Help is Key!)

The AI revolution is upon us, and savvy investors stand to make a fortune.

But with so many choices, how do you find the hidden gem – the company poised for explosive growth?

That’s where our expertise comes in.

We’ve got the answer, but there’s a twist…

Imagine an AI company so groundbreaking, so far ahead of the curve, that even if its stock price quadrupled today, it would still be considered ridiculously cheap.

That’s the potential you’re looking at. This isn’t just about a decent return – we’re talking about a 10,000% gain over the next decade!

Our research team has identified a hidden gem – an AI company with cutting-edge technology, massive potential, and a current stock price that screams opportunity.

This company boasts the most advanced technology in the AI sector, putting them leagues ahead of competitors.

It’s like having a race car on a go-kart track.

They have a strong possibility of cornering entire markets, becoming the undisputed leader in their field.

Here’s the catch (it’s a good one): To uncover this sleeping giant, you’ll need our exclusive intel.

We want to make sure none of our valued readers miss out on this groundbreaking opportunity!

That’s why we’re slashing the price of our Premium Readership Newsletter by a whopping 70%.

For a ridiculously low price of just $29, you can unlock a year’s worth of in-depth investment research and exclusive insights – that’s less than a single restaurant meal!

Here’s why this is a deal you can’t afford to pass up:

• Access to our Detailed Report on this Game-Changing AI Stock: Our in-depth report dives deep into our #1 AI stock’s groundbreaking technology and massive growth potential.

• 11 New Issues of Our Premium Readership Newsletter: You will also receive 11 new issues and at least one new stock pick per month from our monthly newsletter’s portfolio over the next 12 months. These stocks are handpicked by our research director, Dr. Inan Dogan.

• One free upcoming issue of our 70+ page Quarterly Newsletter: A value of $149

• Bonus Reports: Premium access to members-only fund manager video interviews

• Ad-Free Browsing: Enjoy a year of investment research free from distracting banner and pop-up ads, allowing you to focus on uncovering the next big opportunity.

• 30-Day Money-Back Guarantee: If you’re not absolutely satisfied with our service, we’ll provide a full refund within 30 days, no questions asked.

Space is Limited! Only 1000 spots are available for this exclusive offer. Don’t let this chance slip away – subscribe to our Premium Readership Newsletter today and unlock the potential for a life-changing investment.

Here’s what to do next:

1. Head over to our website and subscribe to our Premium Readership Newsletter for just $29.

2. Enjoy a year of ad-free browsing, exclusive access to our in-depth report on the revolutionary AI company, and the upcoming issues of our Premium Readership Newsletter over the next 12 months.

3. Sit back, relax, and know that you’re backed by our ironclad 30-day money-back guarantee.

Don’t miss out on this incredible opportunity! Subscribe now and take control of your AI investment future!

Subscribe Now!

No worries about auto-renewals! Our 30-Day Money-Back Guarantee applies whether you’re joining us for the first time or renewing your subscription a year later!

Meet the company that could save the green energy revolution

Published on November 27, 2024 at by Insider Monkey Staff

This emerging clean energy company aims to gain a competitive global benefit from controlling one of the BEST HPQ silica sand districts in this world!

Expectations of lower interest rates and long-term demand for clean energy could create tremendous near-term growth in the clean energy space. This shines the spotlight on an under-the-radar company.

This is a growing small-cap company poised to become a pioneering force in the high-purity HPQ silica industry!

Did you know that HPQ silica is a key component in the clean energy revolution? It is used in many solutions in the energy and tech sectors.

Click to continue reading…

Insider Monkey Ads

Markets

Insider Trading

Hedge Funds

Retirement

Opinion

Log In

Sign Up