Software stocks had a troubling end to the last year and some even continued to fall during January. After a solid year, profit-taking would have been acceptable. However, the continuous decline in January had investors worried, with some media personalities calling it the end of software stocks.
It didn’t take the market long to change its views though. In general, software stocks are not as negatively impacted by tariffs as hardware stocks. Since Trump took over, people have been evaluating their options and with tariffs on the horizon, found software to be a relatively safe sector.
There were some concerns on the AI front as well. The emergence of DeepSeek AI has meant that companies in the US may not be willing to spend more on their AI ventures. Similarly, businesses could simply use DeepSeek’s much cheaper technology, causing downward pressure on subscription prices for instance. So far, none of this looks like becoming a reality, so on the back of solid earnings, most software stocks have comfortably outperformed the market.
We decided to take a look at the top 15 stocks that are outperforming the market so far this year. To come up with our list of 15 software infrastructure stocks outperforming in 2025, we only considered stocks with a market cap of at least 2 billion that were outpacing the broader market till the end of last week.
15. DLocal Limited (NASDAQ:DLO)
DLocal Limited is a payment processing system provider that offers pay-in and pay-out solutions. The company sells its products to streaming, SaaS, travel, financial services, gaming and crypto, commerce, e-learning, ride-hailing, on-demand delivery, and advertising industries. The company’s stock is up over 9% this year. While it has almost doubled in the last few months, the stock is still down about 80% from its all-time highs hit in 2021.
There are two reasons why the stock is outperforming this year. For starters, the company is on a recovery path and the numbers are finally starting to show that recovery. Q3 revenues rose 13.3% YoY, comfortably beating analyst estimates. In the last two quarters, gross profit has also grown. Payment volumes grew a whopping 41% YoY on the strength of international operations including Latin America, South Africa, Egypt, and Mexico.
The second reason for the optimism is the potential of an acquisition. In December, Reuters claimed that the company had engaged JP Morgan for a potential sale to interested parties. This could be one way to unlock better valuation in the stock but the CEO last month clarified that the company is not up for sale. Even though the management has clarified matters this time, investors could still be betting for an eventual sale, or at least a resurfacing of the rumors and that’s what has helped the stock outperform the market this year.
14. MongoDB Inc. (NASDAQ:MDB)
MongoDB Inc. is a general-purpose database platform provider. It offers a range of products and services including MongoDB Enterprise Advanced, MongoDB Atlas, and MongoDB Community Server. The company also provides consulting and training services. The stock is up over 13.5% this year and analysts are optimistic it has much more to go.
Morgan Stanley picked the stock as a top pick in its 2025 generative AI outlook report. The investment bank believes that the cost of data and computing going down aligns well with the broadening capabilities and the increasing demand for software infrastructure. This is likely going to positively affect the earnings of the company in 2025.
Similarly, analysts at financial services firm Cantor have a price target of $344 on the stock, a 23.7% upside from current levels:
we could see a scenario where numbers improve off these changes, given the consumption nature of the business, would lead to torque to the upside and drive revenue growth to mid 20%
71% of MongoDB’s Q3 revenue came from its cloud offering called MongoDG Atlas. It looks like this business segment is still in an early growth stage and poised to power the company’s growth in the coming quarters.
