12 Best Software Infrastructure Stocks to Buy According to Hedge Funds

Core Insights - The article discusses the best software infrastructure stocks to buy according to hedge funds, highlighting the potential growth in the software application layer driven by AI infrastructure spending [1][4]. Industry Overview - An estimated $45 trillion opportunity may arise in the software application layer as AI infrastructure spending increases, similar to the early days of cloud computing [2]. - Data center investments are accelerating, with billions already invested, leading to a 9x multiplier for the implied enterprise value of software companies, which benefit from this spending [3]. Company Analysis - F5 Inc. (NASDAQ:FFIV) has a market cap of $15.6 billion and is held by 40 hedge funds. RBC Capital Markets upgraded its rating to Outperform with a price target increase to $325, indicating a 27% upside potential [8]. - F5's stock has declined by approximately 25% since mid-October 2025 due to a significant security breach, but RBC views this as a favorable entry point [11]. - Medium-term growth drivers for F5 include cloud repatriation, AI-driven workload monetization, and a focus on security solutions [12][13]. - Nutanix Inc. (NASDAQ:NTNX) has a market cap of $14.4 billion and is held by 47 hedge funds. RBC Capital lowered its price target to $65 but maintained an Outperform rating, indicating confidence in long-term growth despite near-term momentum concerns [14]. - RBC noted an increase in M&A activity in the software sector, with Nutanix identified as a leading candidate for acquisition in the infrastructure, security, and analytics space [16].