Software revenue totaled $192 million, down 8% year-over-year, which Werner attributed to a difficult comparison against the prior-year quarter that included an “eight-figure” renewal and unusually strong perpetual software results tied to specific service provider deals. Subscription-based software revenue was $164 million, up 1% year-over-year, while perpetual licensed software revenue was $27 million, down year-over-year.Revenue grew 7% year-over-year to $822 million, with an even split between product r ...

Core Viewpoint - F5 Inc. (NASDAQ:FFIV) is considered one of the top software infrastructure stocks to buy, with RBC Capital Markets upgrading its rating to Outperform and raising the price target to $325, indicating a potential upside of 27% [1] Group 1: Stock Performance and Market Reaction - Following a significant security incident in October, F5's stock value has eroded, with a decline of approximately 35% since the breach was disclosed [3] - As of January 5, F5's stock is down about 25% since mid-October, which RBC views as a favorable entry point for investors [4] Group 2: Financial Impact and Analyst Insights - RBC's analysis suggests that the financial impact of the security incident will be less severe than initially estimated, and consensus estimates now account for the associated headwinds, reducing near-term execution uncertainty [2] - The upgrade from RBC Capital Markets reflects a belief that the stock's recent correction presents a buying opportunity [4] Group 3: Growth Drivers and Future Outlook - RBC identified several medium-term growth drivers for F5, including potential benefits from cloud repatriation, early monetization opportunities from AI-driven workloads, and a focus on security-oriented solutions [5] - Increased investment in private data centers is also seen as a favorable demand driver for F5's services [5] Group 4: Company Overview - F5 Inc. provides core application delivery and security infrastructure through its Application Delivery and Security Platform (ADSP), enabling the secure delivery of applications and APIs across various environments, including on-premises and multi-cloud [6]

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].