The artificial intelligence (AI) boom has been one of the biggest drivers of stock market gains over the past two years. Much of the excitement has centered on semiconductor companies that supply the chips powering AI models, data centers and next-generation computing infrastructure. Investors have poured billions into AI hardware stocks, helping many chipmakers achieve massive valuation gains and market-beating returns.
However, as the AI investment cycle matures, attention is gradually shifting from the infrastructure layer to the software companies that monetize AI technologies. While chips remain essential, the real long-term value creation may come from businesses that use AI to improve productivity, automate workflows and deliver measurable returns to customers.
This shift is expected to bring the spotlight toward software companies, including Palantir Technologies, Inc. PLTR, Block, Inc. XYZ, Atlassian Corporation TEAM and DocuSign, Inc. DOCU, which can effectively monetize AI across large customer bases. History shows that once a new technology platform is established, software companies often capture a significant share of the economic benefits.
This transition creates an attractive opportunity for investors. The aforementioned software stocks have lagged the spectacular gains seen in AI-focused hardware names, despite delivering strong revenue growth, expanding profit margins and increasing adoption of AI-powered products. As enterprises move beyond building AI infrastructure and focus on practical applications, software providers could emerge as the next major beneficiaries of the AI revolution.
The independent market research firm Gartner predicts that worldwide IT spending on software will increase 15.1% year over year to $1.44 trillion in 2026. The projected surge in software spending will benefit the companies in this space.
Palantir Technologies, Block, Atlassian and DocuSign stand out as four software stocks that could deliver impressive gains as hardware mania fades and software-driven AI adoption accelerates. These stocks have a favorable combination of a Growth Score of A or B and a Zacks Rank #1 (Strong Buy) or #2 (Buy), offering solid investment opportunities.
Our Picks
Block continues to strengthen its position in digital payments and financial services through its Square and Cash App ecosystems. AI is helping Block improve customer engagement, enhance risk management and deliver more personalized financial services. The company is also leveraging AI to streamline merchant operations and improve payment processing efficiency. Cash App continues to attract active users, while merchant adoption remains strong across businesses of all sizes.
As digital payments and financial automation continue to expand globally, Block has multiple growth drivers beyond traditional payment processing. Its ability to combine AI capabilities with a large financial ecosystem positions the company to benefit from increasing demand for intelligent financial solutions.
In the first quarter of 2026, Block’s revenues and adjusted earnings per share (EPS) increased 4.9% and 51.8%, respectively, on a year-over-year basis. The Zacks Consensus Estimate for 2026 revenues and EPS suggests a year-over-year increase of 8.3% and 62.9%, respectively. The consensus mark for 2026 earnings has been revised upward over the past 30 days.
Shares of XYZ have risen 3.5% over the past year, underperforming the broader Zacks Computer and Technology’s gain of 43.6%. Currently, Block sports a Zacks Rank #1 and has a Growth Score of A. You can see the complete list of today’s Zacks #1 Rank stocks here.
Block, Inc. Price and Consensus
Block, Inc. price-consensus-chart | Block, Inc. Quote
Atlassian’s latest focus on adding generative AI features to some of its collaboration software is likely to drive the top line over the long run. The company has collaborated with OpenAI to enhance the capabilities of its Confluence, Jira Service Management and other programs with generative AI features. The company is offering generative AI-enabled features under the Atlassian Intelligence brand, which is designed to help employees be more efficient while users remain in control of data.
Atlassian’s AI-powered capabilities are seeing rapid adoption. The company’s AI-powered Rovo platform and automation tools are driving significant growth in premium and enterprise editions, demonstrating high demand for AI-enhanced workflows. In the third quarter of fiscal 2026, Atlassian continued to add millions of monthly active users to Rovo and saw Rovo customers growing their ARR two times faster than customers not using Rovo. Investments in multi-model AI strategies and advanced search capabilities further differentiate Atlassian’s offerings in an increasingly competitive landscape.
In the third quarter of fiscal 2026, Atlassian’s revenues and non-GAAP EPS surged 31.7% and 80.4%, respectively, on a year-over-year basis. The Zacks Consensus Estimate for fiscal 2026 revenues and EPS suggests a year-over-year increase of 23.6% and 48.9%, respectively. The consensus mark for fiscal 2026 earnings has been revised upward over the past 60 days.
Currently, Atlassian sports a Zacks Rank #1 and has a Growth Score of B. TEAM shares have fallen 53.7% over the past year.
Atlassian Corporation PLC Price and Consensus
Atlassian Corporation PLC price-consensus-chart | Atlassian Corporation PLC Quote
Palantir Technologies has become one of the biggest software beneficiaries of the AI revolution. The company’s Artificial Intelligence Platform enables governments and enterprises to deploy AI models across real-world operations, helping organizations improve decision-making, automate workflows and increase efficiency.
Palantir Technologies' commercial business has been a major growth engine, driven by rising demand for AI-powered solutions. The company has consistently reported strong customer additions and expanding contract values as businesses move from AI experimentation to production-scale deployments. Unlike many software firms still developing AI strategies, Palantir Technologies is already generating meaningful revenues from AI adoption.
In the first quarter of 2026, Palantir Technologies’ revenues and non-GAAP EPS surged 85% and 154%, respectively, on a year-over-year basis. The Zacks Consensus Estimate for 2026 revenues and EPS suggests a year-over-year increase of 71.8% and 98.7%, respectively. The consensus mark for 2026 earnings has been revised upward over the past 60 days.
Currently, Palantir Technologies carries a Zacks Rank #2 and has a Growth Score of A. PLTR shares have gained 2.6% over the past year.
Palantir Technologies Inc. Price and Consensus
Palantir Technologies Inc. price-consensus-chart | Palantir Technologies Inc. Quote
DocuSign is moving far beyond electronic signatures. The company is transforming itself into a comprehensive agreement management platform powered by artificial intelligence. Its Intelligent Agreement Management offering helps organizations analyze contracts, identify risks and automate workflows throughout the agreement lifecycle.
Businesses generate enormous volumes of contracts and legal documents, creating a significant opportunity for AI-driven automation. DocuSign’s large customer base provides a strong foundation for cross-selling these advanced solutions. The company has also delivered improved profitability and steady subscription revenue growth. As enterprises focus on reducing manual processes and increasing operational efficiency, DocuSign’s AI-enhanced platform could become a critical business tool, supporting long-term growth.
In the first quarter of fiscal 2027, DocuSign’s revenues and non-GAAP EPS grew 9% and 21%, respectively, on a year-over-year basis. The Zacks Consensus Estimate for fiscal 2027 revenues and EPS suggests a year-over-year increase of 8.4% and 15.4%, respectively. The consensus mark for fiscal 2027 earnings has been revised upward over the past 60 days.
Currently, DocuSign carries a Zacks Rank #2 and has a Growth Score of A. Shares of DOCU have plunged 39.8% over the past year.
Docusign Inc. Price and Consensus
Docusign Inc. price-consensus-chart | Docusign Inc. Quote
Beyond Nvidia: AI's Second Wave Is Here
The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.
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This article originally published on Zacks Investment Research (zacks.com).