In this article, we will take a look at the 5 best software infrastructure stocks to buy. To see more such companies, go directly to 12 Best Software Infrastructure Stocks to Buy.
5. CrowdStrike Holdings, Inc. (NASDAQ:CRWD)
Number of Hedge Fund Holders: 72
Cybersecurity and Cloud services company CrowdStrike Holdings, Inc. (NASDAQ:CRWD) provides Infrastructure as Code (IaC), Cloud infrastructure and infrastructure monitoring services. IaC includes automating infrastructure provisioning, deployment, configuration, and management, orchestrating infrastructure components, configuring and monitoring all systems.
As of the end of the first quarter of 2023, 72 hedge funds tracked by Insider Monkey reported having stakes in CrowdStrike Holdings, Inc. (NASDAQ:CRWD), up from 66 hedge funds in the previous quarter. The most significant shareholder of CrowdStrike Holdings, Inc. (NASDAQ:CRWD) was Ken Griffin’s Citadel Investment Group which owns a $232 million stake in the company.
Artisan Developing World Fund made the following comment about CrowdStrike Holdings, Inc. (NASDAQ:CRWD) in its Q1 2023 investor letter:
“Top contributors to performance for the quarter included graphics semiconductor company Nvidia, Southeast Asian e-commerce platform Sea, Latin American marketplace MercadoLibre, online travel marketplace Airbnb, and endpoint security company CrowdStrike Holdings, Inc. (NASDAQ:CRWD). CrowdStrike rebounded as its financial results eased demand-related concerns in its core endpoint business, while adoption in platform adjacencies continued to rise.”
4. Palo Alto Networks Inc. (NYSE:PANW)
Number of Hedge Fund Holders: 87
Palo Alto Networks Inc. (NYSE:PANW) provides Cloud security services that help businesses protect their software infrastructure. Palo Alto Networks Inc. (NYSE:PANW)’s Cloud NGFW solutions allows easy deployment of firewalls on Cloud platforms.
A total of 87 hedge funds tracked by Insider Monkey were bullish on Palo Alto Networks Inc. (NYSE:PANW) as of the end of the first quarter. The biggest hedge fund stakeholder of Palo Alto Networks Inc. (NYSE:PANW) was Citadel Investment Group of Ken Griffin which owns a $592 million stake in the company.
3. ServiceNow Inc. (NYSE:NOW)
Number of Hedge Fund Holders: 96
ServiceNow Inc. (NYSE:NOW) provides products and solutions that help businesses keep a smooth flow of operations. ServiceNow Inc. (NYSE:NOW)’s services allow Cloud monitoring, IT management, automated deployment of software, easy integrations and more.
A total of 96 hedge funds tracked by Insider Monkey had stakes in ServiceNow Inc. (NYSE:NOW). The biggest stakeholder of ServiceNow Inc. (NYSE:NOW) during this period was Rajiv Jain’s GQG Partners which owns a $714 million stake in ServiceNow Inc. (NYSE:NOW).
2. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 243
Amazon.com, Inc. (NASDAQ:AMZN) dominates the Cloud markets. It provides software infrastructure solutions and services to small and large businesses. In the first quarter Amazon Web Services revenue jumped 16% on a YoY basis to $21.4 billion. While the growth was slower when compared to the previous quarter, Amazon.com, Inc. (NASDAQ:AMZN) is hopeful it will get back on its fast growth trajectory once the global macroeconomic condition improves.
Amazon.com, Inc. (NASDAQ:AMZN) recently announced that it plans to invest a massive $12.7 billion in cloud infrastructure in India.
As of the end of the first quarter of 2023, 243 hedge funds had stakes in Amazon.com, Inc. (NASDAQ:AMZN). The biggest stakeholder of Amazon.com, Inc. (NASDAQ:AMZN) was Natixis Global Asset Management’s Harris Associates which owns a $2 billion stake in the company.
Arch Capital made the following comment about Amazon.com, Inc. (NASDAQ:AMZN) in its Q1 2023 investor letter:
“Replacing our Wix investment is Amazon.com, Inc. (NASDAQ:AMZN), a company we are sure you have heard of before. We believe the company’s long-term growth runway, profit potential, and competitive advantages were being vastly underrated in early January when its market cap was well below $1 trillion. We think early January was one of those rare times you could buy a special business like Amazon at a discounted valuation. Our hope is that – if we are right about its competitive advantages in retail and cloud computing – our Amazon stake will end up being a permanent holding in the limited partnership.”
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 289
Microsoft Corporation (NASDAQ:MSFT) is the second biggest player in the Cloud market. Thousands of companies use Microsoft Cloud solutions for their daily business needs. Microsoft Azure infrastructure services help businesses scale their IT solutions and adopt Cloud seamlessly. As of the end of the first quarter, Microsoft Corporation (NASDAQ:MSFT)’s market share in the Cloud markets stands at 23%, much higher than Alphabet Inc. (NASDAQ:GOOG). Most importantly, Microsoft Azure grew faster than Amazon Web Services in the first quarter.
More and more hedge funds keep adding Microsoft Corporation (NASDAQ:MSFT) in their portfolios. Insider Monkey’s database shows that 289 hedge funds had stakes in Microsoft Corporation (NASDAQ:MSFT) at the end of March, up from 259 funds in the fourth quarter of 2022.
Alger Spectra Fund made the following comment about Microsoft Corporation (NASDAQ:MSFT) in its Q1 2023 investor letter:
“Microsoft Corporation (NASDAQ:MSFT) is a beneficiary of corporate America’s transformative digitization. Microsoft’s CEO expects technology spending as a percent of Gross Domestic Product (GDP) to jump from about 5% now to 10% in 10 years and that Microsoft will continue to capture market share within the technology sector. The company operates through three segments: Productivity and Business Processes (Office. LinkedIn, and Dynamics), Intelligent Cloud (Server Products and Cloud Services. Azure, and Enterprise Services), and More Personal Computing (Windows Devices, Gaming, and Search). While the company reported decent fiscal second quarter results, their investment in OpenAl’s ChatGPT captured the attention of investors. contributing to positive performance. Throughout the quarter. Microsoft surprised investors with continual rollouts of new Al capabilities across the company’s portfolio (e.g., Bing, GitHub. Teams, Office 365). Furthermore, the company announced Microsoft 365 Copilot, which leverages GPT-4, a large language model, combined with the Microsoft Graph of data to provide Al virtual assistance. We believe Microsoft’s investment in OpenAl provides a first-mover advantage in the Al transformer model space. Despite challenges in the early days of Al-powered applications, the pace of Al innovation is faster than any other enterprise technology previously observed, in our view.”
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