For Immediate Release
Chicago, IL – February 10, 2026 – Today, Zacks Investment Ideas feature highlights iShares Expanded Tech-Software Sector ETF IGV, AppLovin APP, Palantir Technologies PLTR, Salesforce CRM, ServiceNow NOW and Robinhood Markets HOOD.
5 Top Software Stocks Investors Can Buy Now
Software stocks, long viewed as some of the market’s most attractive business models, have been hit hard in recent months as investor concerns around artificial intelligence and large language models intensified. The selloff has been significant, with the iShares Expanded Tech-Software Sector ETF, a widely followed proxy for the software space, falling more than 20% over that stretch. The fear is that AI will materially disrupt traditional software economics. While that risk is real, expectations appear to have moved too far, too fast. AI is likely to reshape parts of the software landscape, but it is unlikely to render entire categories obsolete.
As a result, the market appears to be pricing in a level of disruption that does not align with the durability of the strongest platforms. Over time, sentiment tends to mean revert, and that dynamic is now creating compelling opportunities among premium software names.
For much of the past decade, Wall Street assigned substantial valuation premiums to software companies, attracted by asset light models, high margins, recurring revenue, and near-zero marginal costs. In my view, many of those premiums became excessive, bordering on structural overvaluation, which kept me cautious on the sector despite the quality of the businesses. That backdrop has changed meaningfully.
Today, several of the industry’s strongest franchises are trading near cyclical lows, even as their competitive positions remain intact. AppLovin, Palantir Technologies, Salesforce, ServiceNow and Robinhood Markets stand out as leading platforms where valuations have reset and risk-reward profiles are becoming increasingly difficult to ignore.
AppLovin: Stock Rebound May Signal the Start of the Next Leg Higher
AppLovin shares are surging today after recent money laundering allegations against the company were withdrawn, removing a key overhang that had pressured the stock. Prior to the rebound, APP had fallen roughly 50% from its record highs, a drawdown that appeared disconnected from the company’s underlying momentum. While the recovery has been sharp, it may represent the early stages of a broader move higher rather than a short-lived bounce.
AppLovin has quietly developed into one of the market’s more compelling growth stories. The company has delivered substantial appreciation in recent years as its industry-leading digital advertising platform expands at a rapid pace. Just as important, management has been aggressive in embedding AI across its ecosystem to improve targeting, optimize ad performance, and drive operating leverage, initiatives that are increasingly flowing through to the bottom line.
The company currently carries a Zacks Rank #2 (Buy), supported by modest upward revisions to earnings estimates. Sales are projected to climb 18.2% this year and accelerate another 38.3% next year, while earnings are expected to surge 106% followed by an additional 62.5% gain. Despite that growth profile, the stock trades at roughly 25x forward earnings—a multiple that appears reasonable given the company’s expansion rate and improving profitability trajectory.
Salesforce: Shares Trade at Historical Discount
Salesforce, one of the original SaaS pioneers and a dominant force in enterprise software, has also been pulled lower by the prevailing “AI-disrupts-software” narrative. That selloff has occurred despite the company’s scale, entrenched customer base, and ongoing innovation. Today, Salesforce carries a Zacks Rank #2 (Buy), supported by solid growth expectations and a valuation that stands out relative to its own history.
Shares are currently trading at roughly 14.7x forward earnings, the lowest multiple Salesforce has commanded since becoming a public company. Revenue is expected to grow 9.5% this year and 10.9% next year, while earnings are projected to rise 15.3% this year and another 10.5% next year—respectable growth for a company of its size.
With expanding AI and large language model initiatives, deep integration across enterprise workflows, and consistently strong fundamentals, Salesforce appears mispriced at current levels and is not a stock investors should overlook.
Palantir Technologies: A Market Leading Stock on Sale
Palantir Technologies has quickly established itself as one of the world’s leading software companies, with its share price reflecting that ascent over the past several years. Supported by deep, long-duration government contracts and a suite of highly differentiated data and analytics platforms, Palantir has emerged as one of the market’s premier software franchises.
Shares have corrected nearly 40% over the past few months as investor sentiment toward AI and software shifted. That pullback has helped moderate valuation, though Palantir still trades at a premium relative to most peers. The stock currently changes hands at roughly 100x forward earnings, a lofty multiple, but one backed by exceptional growth expectations and a competitive moat that remains largely uncontested.
Revenue is projected to climb 61.4% this year and 40.8% next year, while earnings are expected to surge 78.7% this year followed by a 42.2% increase next year. Palantir also carries a Zacks Rank #2 (Buy), reflecting continued confidence in the company’s earnings trajectory despite the recent volatility. Earnings estimates have jumped more than 30% across timeframes in the last week alone.
ServiceNow: SaaS Stock at a Rare Discount
ServiceNow has long been viewed as one of the highest-quality franchises in enterprise software, frequently commanding a premium multiple reflective of its durable growth and mission critical offerings. That dynamic has shifted. Following the broader software selloff, shares are now trading at one of the most attractive valuations in the company’s history.
Best known for its market leading, cloud-based workflow platform, ServiceNow is deeply embedded across large enterprises, serving roughly 85% of the Fortune 500 and about 60% of the Global 2000. That level of penetration underscores both the stickiness of its products and the strategic importance of its software within modern corporate infrastructure.
Today, the stock trades at approximately 24.5x forward earnings, an all-time low multiple for the company, while earnings are projected to expand around 24% annually over the next three to five years. In the nearer term, revenue is expected to grow 20.1% this year and another 18.2% next year. With shares sitting nearly 60% below prior highs, ServiceNow’s combination of scale, visibility, and sustained growth makes the current setup particularly compelling for long-term investors.
Robinhood Markets: Stock Momentum Building
Robinhood Markets is often viewed less as a traditional software company and more as a fintech platform, but it has quietly evolved into one of the market’s more compelling digital financial businesses. Shares are rebounding as investors rotate back into former growth leaders, yet the stock still appears attractively positioned relative to its longer-term fundamentals.
Robinhood has transformed from an entry-level brokerage into a multi-product financial “super app.” Its platform now spans multi-asset trading, wealth management, banking services, credit cards, and additional financial tools, significantly expanding both its addressable market and monetization potential.
The stock currently trades at approximately 33.6x forward earnings, well below its historical median multiple of roughly 50.4x. Over the long term, earnings are projected to grow around 26% annually. Near-term growth remains robust, with revenue expected to climb 53% this year and 21.8% next year, while earnings are forecast to surge 86% this year followed by a 21.2% increase next year.
Should Investors Buy Shares in PLTR, CRM, APP, HOOD and NOW?
Periods of broad pessimism often create the most attractive entry points for high-quality growth stocks, and the recent software correction appears to be one of those moments. While AI introduces legitimate uncertainty, the market may be overstating the speed and severity of disruption, particularly for industry leaders with entrenched platforms, strong balance sheets, and durable demand.
Valuations across several premier franchises have reset to levels rarely seen over the past decade, improving the risk-reward profile for long-term investors. Although volatility could persist as the software landscape evolves, selectively accumulating fundamentally strong names during periods of dislocation has historically proven to be a winning strategy. For investors with a multi-year horizon, these five stocks stand out as compelling candidates for deeper consideration.
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See New Top 10 Stocks >>Salesforce Inc. (CRM) : Free Stock Analysis Report
ServiceNow, Inc. (NOW) : Free Stock Analysis Report
AppLovin Corporation (APP) : Free Stock Analysis Report
iShares Expanded Tech-Software Sector ETF (IGV): ETF Research Reports
Palantir Technologies Inc. (PLTR) : Free Stock Analysis Report
Robinhood Markets, Inc. (HOOD) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
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