4 Software Stocks Poised to Outshine Expectations This Earnings Season

Software stocks are positioned for continued growth, driven by digitalization, AI adoption, and cloud migration, as evidenced by upcoming earnings reports from key players. CoreWeave is expected to demonstrate significant revenue growth, fueled by increasing AI infrastructure demand and a substantial backlog. BILL Holdings benefits from expanding SMB clientele and AI integration, while Affirm Holdings anticipates strong revenue growth and improved profitability through diverse income streams and international expansion. Unity Software faces some pressure from legacy ad products but is strategically leveraging its AI-powered Vector platform for future growth.

Analysis

Software stocks are experiencing robust tailwinds driven by ongoing digitalization, strong adoption of AI, generative AI, and cloud migration, which are fueling demand across enterprise solutions and cybersecurity. The proliferation of SaaS and subscription-based models further supports recurring revenues and affordability, particularly for small and medium-sized businesses, setting a positive market backdrop for upcoming earnings.

CoreWeave (CRWV) is positioned for significant growth, having reported a 207% year-over-year revenue jump in the last quarter and a substantial $30.1 billion backlog, driven by surging AI infrastructure demand and a +15.66% Earnings ESP for Q3 2025. Affirm Holdings (AFRM) anticipates strong Q1 FY26 revenue growth of 26.7% and a projected swing to profitability, underpinned by diverse income streams, expanding merchant networks, and strategic international expansion efforts.

BILL Holdings (BILL) is forecast for 9% year-over-year revenue growth in Q1 FY26, benefiting from an expanding SMB clientele and AI integration, though it faces an anticipated 19.1% year-over-year EPS decline. Unity Software (U) is projected for modest 0.2% year-over-year revenue growth in Q3 2025 due to near-term pressure from legacy ad products and internal product mix transition, but its AI-powered Unity Vector platform showed a 15%+ sequential user acquisition improvement in Q2, indicating strategic progress.

Key Decisions for Investors

• Investors should prioritize software companies demonstrating strong AI-driven growth and substantial backlogs, such as CoreWeave, given its significant revenue trajectory and market positioning in AI infrastructure.
• Consider companies like Affirm Holdings that show robust revenue growth, a clear path to profitability, and successful international expansion, indicating diversified and expanding market opportunities.
• Monitor BILL Holdings' upcoming earnings for insights into its EPS trajectory, balancing its strong balance sheet and AI integration with the projected year-over-year earnings decline.
• For Unity Software, observe the progress and financial impact of its AI-powered Vector platform adoption and the stabilization of its ad segment, as these are critical for overcoming short-term revenue friction and realizing future growth.