We recently published a list of 12 Best Enterprise Software Stocks to Buy Now. In this article, we are going to take a look at where Tyler Technologies, Inc. (NYSE:TYL) stands against other best enterprise software stocks to buy now.
In 2024, the global enterprise market size was estimated at $263.79 billion, according to Grand View Research. It’s expected to now grow at a CAGR of 12.1% from 2025 to 2030, due to the increasing demand for automated and integrated solutions. Enterprise software becomes more desirable as organizations seek reduced reliance on HR to eliminate manual errors and automate routine tasks. Therefore, ERP (enterprise resource planning), CRM (customer relationship management), and data analytics software are becoming increasingly popular.
Enterprise software is actively transforming with the integration of AI technologies, which changes how it’s designed, deployed, and utilized. According to Endava, GenAI is driving this transformation by incorporating creative and analytical capabilities into enterprise applications. This enables software to undergo intelligent tasks like generating reports, creating personalized training materials, and writing codes. AI not only automates manual jobs but also allows hyper-personalization of customer-facing enterprise software. This allows platforms like CRM and e-commerce to deliver targeted content and recommendations, which leads to higher customer satisfaction and improved sales. This is fueled by adaptive AI-enhanced enterprise software that learns from vast datasets to provide real-time and individualized interactions.
AI-driven automation is also becoming more popular in core business processes. ERP and workflow management systems are automating complex tasks and reducing manual intervention to improve overall efficiency. Enterprises are streamlining operations and making data-driven solutions through the integration of now-standard features like process mining, intelligent document processing, and predictive analytics. Agentic AI is further pushing enterprise software towards greater autonomy. These are AI systems that act like human agents and autonomously perceive, reason, and analyze data to achieve certain goals. As enterprise software continues to integrate advanced AI capabilities in its regular applications, the technology becomes more proactive and intelligent.
Our Methodology
We sifted through ETFs and financial media reports to compile a list of the top enterprise software stocks. We then selected the 12 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 Q4 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A close-up of a businessman in corporate attire discussing financial management solutions with a client.
Tyler Technologies, Inc. (NYSE:TYL)
Number of Hedge Fund Holders: 44
Tyler Technologies, Inc. (NYSE:TYL) offers integrated software and tech management solutions for the public sector. It operates in two segments: Enterprise Software and Platform Technologies. It offers transformative technology solutions such as cybersecurity, customized employee training, and data and insights.
The company is currently transitioning its enterprise software offerings to a cloud-first model, which prioritizes cloud-based services over traditional on-premises solutions. This will enhance scalability, innovation, and client satisfaction. In Q4 2024, the company’s new software contract value rose by 97% year-over-year due to cloud-based (SaaS) deals. SaaS revenue alone grew by 23%, which marked the 16th consecutive quarter of over 20% SaaS growth.
Tyler Technologies, Inc. (NYSE:TYL) is actively shifting its on-premises clients to the cloud. 106 migrations happened in Q4 alone. This increased the total contract value by 58% year-over-year, with ARR then reaching about $32,000. The company expects these migrations to peak between 2027 and 2028, with almost 80% of clients shifting to the cloud. This positions the company for an organic recurring revenue CAGR of 10% to 12% between 2025 and 2030.
The company benefitted from its conversion to a SaaS provider, which led Conestoga Capital Advisors to state the following regarding Tyler Technologies, Inc. (NYSE:TYL) in its Q3 2024 investor letter:
“A software services company, Tyler Technologies, Inc. (NYSE:TYL) reported quarterly results that beat expectations as their conversion to a software-as-a-service (SaaS) provider gathered momentum and boosted earnings. TYL provides software to municipalities and other public government agencies that are used across a wide range of applications. Originally purchased by Conestoga in our Small Cap Growth portfolios in 2008, we added TYL to the Mid Cap Growth portfolios in 2016. TYL was sold from the Small Cap Growth strategy as its market capitalization rose above $13 billion. Our Mid Cap Growth portfolios have continued to hold TYL, and the company’s market capitalization was near $25 billion at the end of the third quarter.”
Overall, TYL ranks 11th on our list of best enterprise software stocks to buy now. While we acknowledge the growth potential of TYL, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than TYL but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
