The Zacks-defined Internet Software industry is benefiting from the high demand for AI-powered Software as a Service (SaaS) solutions backed by the increasing need for remote working, learning and diagnosis software. 

However, Internet software stocks have seen volatility as fears of AI disrupting the traditional SaaS space continue to gain traction. Heightened geopolitical risks and tariff uncertainties are major headwinds. Consequently, several AI-powered Internet software giants have lagged Wall Street’s key benchmark — the S&P 500 index — in the past three months. 

Here we recommend five such stocks with a favorable Zacks Rank that have significant upside potential in the short term. These are: Palantir Technologies Inc. (PLTR Quick QuotePLTR - Free Report) , Salesforce Inc. (CRM Quick QuoteCRM - Free Report) , Atlassian Corp. (TEAM Quick QuoteTEAM - Free Report) , Cloudflare Inc. (NET Quick QuoteNET - Free Report) and HubSpot Inc. (HUBS Quick QuoteHUBS - Free Report) . Each of our picks currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The chart below shows the price performance of our five picks in the past three months.

Image Source: Zacks Investment Research

Palantir Technologies Inc.

Palantir Technologies’ AI strategy is comprehensive, combining its proprietary Foundry and Gotham platforms with a solid plan to promote AI adoption across both government and commercial sectors. PLTR’s AI Platform (AIP) is the backbone of these capabilities, enabling organizations to process large datasets and derive real-time insights. This is especially valuable in sectors requiring extensive data integration, such as defense, healthcare, finance and intelligence, where operational efficiency and decision-making speed are critical. 

In the government sector, Palantir is aligning its AI strategy with U.S. defense priorities. Its work in high-profile initiatives, such as the Department of Defense’s Open DAGIR project, highlights its ability to modernize military operations through AI-driven solutions where data interoperability and real-time decision-making capabilities are imperative. These capabilities solidify PLTR’s position as a key player in the defense sector. 

In the commercial space, Palantir’s AIP boot camps — providing hands-on experience to over 1,000 companies — have proven instrumental in customer acquisition. Boot camps showcase the platform’s capabilities and demonstrate its adaptability across logistics, manufacturing, and supply chain management. PLTR’s core customer base comprises businesses seeking tailored AI/ML services, particularly large government and corporate clients willing to invest heavily in its systems. 

Massive Short-Term Price Upside Potential

Palantir has an expected revenue and earnings growth rate of 71.8% and 98.7%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 11.2% over the last 30 days. 

The short-term average price target of brokerage firms represents an increase of 43.6% from the last closing price of $133.99. The brokerage target price is currently in the range of $90-$255. This indicates a maximum upside of 90.3% and a maximum downside of 32.8%. The risk/reward ratio is 2.75. 

Salesforce Inc.

Salesforce is continuously expanding its generative AI offerings. Generative AI is a type of AI technology that can produce various types of content, including text, imagery, audio and synthetic data. It is driven by a large language model, which means it uses a lot of data to understand and generate conversations. 

CRM forayed into the generative AI space with the launch of Einstein GPT in March 2023. Since then, the company has been investing in its generative AI capabilities through its venture capital fund. CRM has allocated $1 billion under its venture capital fund for generative AI, of which it has deployed over $850 million till October 2025 to support the next generation of enterprise AI companies. 

These investments serve as a strategic engine for the company to maintain its competitive position in the enterprise software space while navigating the AI platform shift. The fund, managed by Salesforce Ventures, benefits the company by fostering an ecosystem of trusted AI partners, accelerating product innovation, and driving financial returns.

CRM has significantly ramped up its investments in Europe, focusing heavily on AI infrastructure, research and development, and local partnerships, with the United Kingdom serving as its primary AI hub for the region. In September 2025, CRM announced a plan to invest $6 billion in its UK business by 2030.

Huge Short-Term Price Upside Potential

Salesforce has an expected revenue and earnings growth rate of 10.9% and 5%, respectively, for the current year (ending January 2027). The Zacks Consensus Estimate for the current year’s earnings has improved 1.1% over the last 90 days. 

The short-term average price target of brokerage firms represents an increase of 59.2% from the last closing price of $173.51. The brokerage target price is currently in the range of $188-$475. This indicates a maximum upside of 173.8% and no downside. The risk/reward ratio is extremely favorable.

Atlassian Corp.

Atlassian’s AI-powered capabilities are seeing rapid adoption. TEAM’s AI-powered Rovo platform and automation tools are driving significant growth in premium and enterprise editions, demonstrating high demand for AI-enhanced workflows. 

Atlassian has been continuously adding 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 TEAM’s offerings in an increasingly competitive landscape.

TEAM’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. 

Excellent Short-Term Price Upside Potential

Atlassian has an expected revenue and earnings growth rate of 14.3% and 10.8%, respectively, for the next year (ending June 2027). The Zacks Consensus Estimate for the current year’s earnings has improved 0.7% over the last seven days. 

The short-term average price target of brokerage firms represents an increase of 46.3% from the last closing price of $87.46. The brokerage target price is currently in the range of $95-$295. This indicates a maximum upside of 237.3% and no downside. The risk/reward ratio is extremely favorable.

Cloudflare Inc.

Cloudflare is benefiting from the demand for integrated security, networking and developer services as enterprises modernize and AI reshapes internet traffic. NET’s AI-focused networking and cybersecurity offerings are gaining traction as more workloads shift toward edge architectures. 

NET noted that it added 1 million developers in the first quarter of 2026, and highlighted customer interest in controlling and monetizing AI bot and agent traffic. This expands the opportunity for the Workers platform and related products as customers build real-time applications closer to end users. NET also noted that AI and agents are becoming a larger share of how software is built and consumed, supporting longer-term platform demand.

Strong Short-Term Price Upside Potential

Cloudflare has an expected revenue and earnings growth rate of 29.5% and 22.6%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 0.9% over the last seven days. 

The short-term average price target of brokerage firms represents an increase of 20.8% from the last closing price of $197.56. The brokerage target price is currently in the range of $136-$300. This indicates a maximum upside of 51.9% and a maximum downside of 31.2%. The risk/reward ratio is 1.66. 

HubSpot Inc.

HubSpot is witnessing steady multi-hub adoption from enterprise customers in the premium market. HUBS’ AI, which includes cutting-edge features such as AI assistance, AI agents, AI insights, and ChatSpot, is driving more value to its customers. 

HUBS has integrated HubSpot AI across its entire product suites and customer platform, enabling users to leverage AI features at no additional cost. Pricing optimization and the transition to a seat pricing model are expected to drive customer growth. 

HubSpot’s AI strategy is increasingly contributing to customer engagement and monetization. HUBS continues to expand Breeze AI capabilities across its customer platform through AI assistants, agents and automation tools. Active Core Seat users increased 90% year over year during first-quarter 2026, while more than 25% of Pro+ customers purchased additional Core Seats. 

Credit consumption grew 67% sequentially, supported by growing adoption of Customer Agent, Prospecting Agent and Data Agent. HUBS expects AI-driven seats and credit usage to become incremental long-term revenue drivers.

Impressive Short-Term Price Upside Potential

HubSpot has an expected revenue and earnings growth rate of 18.3% and 30.3%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 1.6% over the last seven days. 

The short-term average price target of brokerage firms represents an increase of 41.8% from the last closing price of $198.38. The brokerage target price is currently in the range of $180-$425. This indicates a maximum upside of 114.2% and a maximum downside of 9.3%. The risk/reward ratio is 12.28.