The Best AI Shares to Buy: A Rare Market Window for Tech Investors

Software stocks have dramatically lagged behind the broader market over the past year, with the S&P North American Technology Software Index trailing the S&P 500 by 19 percentage points. This represents the worst relative performance for the software sector since the 2022 bear market, and excluding that period, software equities have never experienced such underperformance in the past decade. The culprit? Widespread investor anxiety about how artificial intelligence might disrupt traditional business models and cannibalize demand for established software solutions.

However, Morgan Stanley analysts see a different narrative emerging. They argue that AI-driven productivity gains will expand the developer workforce and spark a massive wave of application modernization projects. In their view, this recent sell-off creates an exceptional buying opportunity—the kind that appears perhaps once every ten years. Within this context, AppLovin and Atlassian stand out as the best ai shares to buy for investors seeking exposure to the AI-driven software transformation.

AppLovin: Capturing AI-Driven Advertising Growth

AppLovin develops advertising technology software that enables brands to reach consumers and monetize digital content through highly targeted campaigns. The company began by focusing on mobile gaming publishers but has since diversified into e-commerce advertising through an expanding self-service platform designed to automate workflow processes.

What differentiates AppLovin in the competitive ad tech landscape? First, the company operates on a performance-based revenue model (cost-per-action) rather than taking a cut of total ad spending like competitors such as The Trade Desk. Second, its proprietary AI recommendation engine, Axon, demonstrates superior targeting performance compared to alternative solutions. According to Morningstar analyst Mark Giarelli, Axon has been central to AppLovin’s competitive edge, delivering 45% higher return on ad spending versus Meta Platforms and 115% better results compared to secondary platforms including TikTok, Pinterest, Snapchat, and YouTube.

Wall Street analysts project AppLovin’s adjusted earnings will expand at a 58% compound annual growth rate through 2027. Despite this exceptional growth trajectory, the current valuation of 66 times earnings appears reasonable—especially considering the company has beaten consensus earnings estimates by an average of 21% over the last six quarters. The median analyst target price sits at $774.50 per share, suggesting 45% upside potential from current levels. For investors comfortable with a measured approach, this represents an attractive entry point into one of the best ai shares available today.

Atlassian: Enterprise Collaboration Powered by Generative AI

Atlassian provides work management and collaboration platforms for development and operations (DevOps) teams alongside non-technical departments such as marketing and human resources. The company also develops IT service management software and holds recognition from Gartner as a technology leader across DevOps, marketing work management, and enterprise service management categories.

Atlassian’s competitive moat rests on two pillars. First, the company invests more heavily in research and development than peers, supported by its efficient self-service sales model and organic word-of-mouth marketing. Second, Atlassian is the only work management vendor offering a unified platform connecting technical teams, non-technical teams, and IT service operations—fostering superior cross-enterprise collaboration while creating numerous upselling opportunities with existing customers.

The company has introduced a comprehensive generative AI feature suite called Rovo, which supports intelligent search capabilities, process automation, and code generation to enhance productivity and operational efficiency. As an established software leader in multiple product categories, Atlassian is well-positioned to become a major beneficiary as the AI revolution accelerates.

Analysts expect Atlassian’s adjusted earnings to grow at 22% annually through fiscal 2027. The current 31 times earnings valuation appears justified, particularly given the company’s track record of beating consensus estimates by 16% on average over the past six quarters. Among 34 analysts covering the stock, the median price target is $225 per share, implying 84% upside from current pricing. With shares trading substantially below their recent highs, investors have a compelling opportunity to establish a position in this best ai shares candidate.

Is Now the Time to Invest?

The current market environment presents a rare confluence of factors: software valuations have compressed to decade-low relative levels while AI adoption accelerates and productivity improvements multiply. AppLovin and Atlassian exemplify companies positioned to capture outsized returns as enterprises embrace AI-powered solutions. Their combination of strong earnings growth, proven operational execution, and strategic AI integration makes them worthy considerations for investors seeking the best ai shares to buy during this distinctive market window.

The historical precedent is compelling. Investors who recognized pivotal moments—such as when certain technology giants were identified as top picks years ago—saw their conviction rewarded with exceptional multiples over subsequent years. Today’s software underperformance may similarly mark a generational buying opportunity for those willing to look beyond near-term noise.