10 Best Pure Play Ai Software for February 2026
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Market Overview & Selection Criteria
The AI software sector continues to drive technology innovation, with companies leveraging data analytics, automation, and machine learning for growth. This collection highlights 10 pure-play AI software stocks analyzed using ValueSense's intrinsic value methodology, focusing on undervalued opportunities based on quality ratings, revenue growth, margins, ROIC, and debt levels. Stocks were selected from ValueSense data emphasizing high intrinsic value potential relative to market dynamics, prioritizing those with strong gross margins, positive free cash flow where possible, and robust revenue growth in the AI space. This watchlist targets best value stocks in AI for retail investors seeking stock picks with diversification across market caps from mega-cap leaders to emerging players.
Featured Stock Analysis
Stock #1: Palantir Technologies Inc. (PLTR)
| Metric | Value |
|---|---|
| Market Cap | $349.5B |
| Quality Rating | 8.1 |
| Intrinsic Value | $20.3 |
| 1Y Return | 80.5% |
| Revenue | $3,896.2M |
| Free Cash Flow | $1,794.8M |
| Revenue Growth | 47.2% |
| FCF margin | 46.1% |
| Gross margin | 80.8% |
| ROIC | 76.6% |
| Total Debt to Equity | 3.5% |
Investment Thesis
Palantir Technologies Inc. (PLTR) stands out with a Quality rating of 8.1 and a massive Market Cap of $349.5B, showcasing exceptional financial health in the AI software arena. Its intrinsic value of $20.3 suggests potential undervaluation amid stellar metrics like Revenue of $3,896.2M, Free Cash Flow of $1,794.8M, and explosive Revenue growth of 47.2%. The FCF margin at 46.1%, Gross margin of 80.8%, and industry-leading ROIC of 76.6% highlight efficient capital use and profitability. With minimal Total Debt to Equity at 3.5% and a strong 1Y Return of 80.5%, PLTR analysis reveals a mature AI platform poised for sustained expansion in data analytics and enterprise solutions.
This positioning makes PLTR a cornerstone for PLTR analysis in undervalued stocks to buy, balancing high growth with financial stability.
Key Catalysts
- Exceptional 47.2% revenue growth fueling AI platform adoption.
- 76.6% ROIC indicating superior returns on invested capital.
- 80.8% gross margin supporting scalability in software delivery.
- Robust $1,794.8M free cash flow for reinvestment and acquisitions.
Risk Factors
- High Market Cap may limit short-term upside volatility.
- Dependence on government and enterprise contracts for revenue stability.
Stock #2: Snowflake Inc. (SNOW)
| Metric | Value |
|---|---|
| Market Cap | $67.0B |
| Quality Rating | 6.3 |
| Intrinsic Value | $75.9 |
| 1Y Return | 7.5% |
| Revenue | $4,386.7M |
| Free Cash Flow | $776.7M |
| Revenue Growth | 28.5% |
| FCF margin | 17.7% |
| Gross margin | 67.1% |
| ROIC | (58.0%) |
| Total Debt to Equity | 122.0% |
Investment Thesis
Snowflake Inc. (SNOW), with a Market Cap of $67.0B and Quality rating of 6.3, offers cloud data platform strengths in AI workflows. Its intrinsic value of $75.9 points to upside, backed by Revenue of $4,386.7M, Free Cash Flow of $776.7M, and solid Revenue growth of 28.5%. FCF margin stands at 17.7%, Gross margin at 67.1%, though ROIC is negative at 58.0% due to growth investments. Elevated Total Debt to Equity of 122.0% warrants monitoring, but 1Y Return of 7.5% reflects steady progress in data warehousing for AI applications.
SNOW's metrics position it as a key SNOW analysis pick in AI stock watchlist opportunities.
Key Catalysts
- Strong 28.5% revenue growth in cloud data services.
- $776.7M free cash flow enabling R&D expansion.
- 67.1% gross margin for competitive pricing power.
- Expanding AI integrations boosting platform usage.
Risk Factors
- Negative 58.0% ROIC signaling capital efficiency challenges.
- High 122.0% debt to equity increasing financial leverage risks.
Stock #3: MongoDB, Inc. (MDB)
| Metric | Value |
|---|---|
| Market Cap | $30.8B |
| Quality Rating | 6.0 |
| Intrinsic Value | $203.4 |
| 1Y Return | 37.0% |
| Revenue | $2,317.1M |
| Free Cash Flow | $358.4M |
| Revenue Growth | 20.9% |
| FCF margin | 15.5% |
| Gross margin | 71.6% |
| ROIC | (23.1%) |
| Total Debt to Equity | 1.2% |
Investment Thesis
MongoDB, Inc. (MDB) features a Market Cap of $30.8B and Quality rating of 6.0, with intrinsic value at $203.4 indicating significant value gap. Key metrics include Revenue of $2,317.1M, Free Cash Flow of $358.4M, and Revenue growth of 20.9%. FCF margin is 15.5%, Gross margin 71.6%, but ROIC at 23.1% reflects investment phase. Low Total Debt to Equity of 1.2% and 1Y Return of 37.0% underscore database solutions tailored for AI scalability.
Ideal for MDB analysis in best value stocks portfolios.
Key Catalysts
- 20.9% revenue growth driving NoSQL database adoption.
- 71.6% gross margin supporting margin expansion.
- $358.4M free cash flow for product innovation.
- AI-driven query optimizations enhancing developer appeal.
Risk Factors
- Negative 23.1% ROIC from heavy growth spending.
- Competition in cloud database markets pressuring pricing.
Stock #4: UiPath Inc. (PATH)
| Metric | Value |
|---|---|
| Market Cap | $6,945.8M |
| Quality Rating | 7.3 |
| Intrinsic Value | $23.4 |
| 1Y Return | -13.6% |
| Revenue | $1,553.1M |
| Free Cash Flow | $311.6M |
| Revenue Growth | 10.1% |
| FCF margin | 20.1% |
| Gross margin | 83.2% |
| ROIC | 26.2% |
| Total Debt to Equity | 3.7% |
Investment Thesis
UiPath Inc. (PATH), at Market Cap $6,945.8M and Quality rating 7.3, shows intrinsic value of $23.4 with robotic process automation focus. Revenue reaches $1,553.1M, Free Cash Flow $311.6M, Revenue growth 10.1%, FCF margin 20.1%, Gross margin 83.2%, and positive ROIC 26.2%. Total Debt to Equity is low at 3.7%, despite 1Y Return of -13.6%, positioning PATH for AI automation recovery.
A balanced PATH analysis for investment opportunities in automation.
Key Catalysts
- 83.2% gross margin highlighting software efficiency.
- 26.2% ROIC demonstrating capital returns.
- $311.6M free cash flow funding AI enhancements.
- Growing enterprise RPA demand.
Risk Factors
- Modest 10.1% revenue growth amid market slowdowns.
- Negative 1Y Return reflecting execution hurdles.
Stock #5: Open Text Corporation (OTEX)
| Metric | Value |
|---|---|
| Market Cap | $6,610.0M |
| Quality Rating | 6.2 |
| Intrinsic Value | $107.1 |
| 1Y Return | -13.9% |
| Revenue | $5,187.5M |
| Free Cash Flow | $905.7M |
| Revenue Growth | (7.5%) |
| FCF margin | 17.5% |
| Gross margin | 72.5% |
| ROIC | 8.2% |
| Total Debt to Equity | 7.4% |
Investment Thesis
Open Text Corporation (OTEX) has Market Cap $6,610.0M, Quality rating 6.2, and intrinsic value $107.1. Despite Revenue growth of 7.5%, Revenue is $5,187.5M with Free Cash Flow $905.7M, FCF margin 17.5%, Gross margin 72.5%, ROIC 8.2%, and Total Debt to Equity 7.4%. 1Y Return -13.9% suggests turnaround potential in AI content management.
Valuable for OTEX analysis in diversified stock picks.
Key Catalysts
- Strong $905.7M free cash flow for acquisitions.
- 72.5% gross margin aiding profitability.
- 8.2% ROIC in enterprise information space.
- AI integrations in information management.
Risk Factors
- Declining 7.5% revenue growth.
- -13.9% 1Y Return from integration challenges.
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Stock #6: nCino, Inc. (NCNO)
| Metric | Value |
|---|---|
| Market Cap | $2,447.2M |
| Quality Rating | 5.2 |
| Intrinsic Value | $32.4 |
| 1Y Return | -38.2% |
| Revenue | $586.5M |
| Free Cash Flow | $59.7M |
| Revenue Growth | 12.1% |
| FCF margin | 10.2% |
| Gross margin | 60.1% |
| ROIC | (0.4%) |
| Total Debt to Equity | 1.4% |
Investment Thesis
nCino, Inc. (NCNO) boasts Market Cap $2,447.2M, Quality rating 5.2, intrinsic value $32.4. Revenue $586.5M, Free Cash Flow $59.7M, Revenue growth 12.1%, FCF margin 10.2%, Gross margin 60.1%, ROIC 0.4%, Total Debt to Equity 1.4%, and 1Y Return -38.2%. Bank-specific AI tools offer niche appeal.
Key NCNO analysis for fintech AI exposure.
Key Catalysts
- 12.1% revenue growth in cloud banking.
- Low 1.4% debt to equity for flexibility.
- 60.1% gross margin supporting scale.
- AI workflow automation for financial services.
Risk Factors
- Near-zero 0.4% ROIC.
- Sharp -38.2% 1Y Return.
Stock #7: C3.ai, Inc. (AI)
| Metric | Value |
|---|---|
| Market Cap | $1,571.8M |
| Quality Rating | 6.0 |
| Intrinsic Value | $14.2 |
| 1Y Return | -65.6% |
| Revenue | $352.9M |
| Free Cash Flow | ($93.2M) |
| Revenue Growth | 1.8% |
| FCF margin | (26.4%) |
| Gross margin | 51.8% |
| ROIC | (234.5%) |
| Total Debt to Equity | 0.0% |
Investment Thesis
C3.ai, Inc. (AI) at Market Cap $1,571.8M, Quality rating 6.0, intrinsic value $14.2. Revenue $352.9M, negative Free Cash Flow $93.2M, Revenue growth 1.8%, FCF margin 26.4%, Gross margin 51.8%, ROIC 234.5%, no debt. 1Y Return -65.6% highlights high-risk AI enterprise play.
AI stock analysis for speculative undervalued stocks.
Key Catalysts
- Zero Total Debt to Equity reducing leverage risk.
- 51.8% gross margin in AI applications.
- Potential enterprise AI adoption rebound.
- Niche in predictive analytics.
Risk Factors
- Severe 234.5% ROIC loss.
- Negative $93.2M free cash flow.
- Weak 1.8% revenue growth.
Stock #8: Rezolve AI PLC (RZLV)
| Metric | Value |
|---|---|
| Market Cap | $613.5M |
| Quality Rating | 10.0 |
| Intrinsic Value | $3.9 |
| 1Y Return | 0.8% |
| Revenue | $6,451.3K |
| Free Cash Flow | ($36.6M) |
| Revenue Growth | N/A |
| FCF margin | (568.0%) |
| Gross margin | 95.4% |
| ROIC | (470.8%) |
| Total Debt to Equity | (248.8%) |
Investment Thesis
Rezolve AI PLC (RZLV), Market Cap $613.5M, tops with Quality rating 10.0 but intrinsic value $3.9. Revenue $6,451.3K, Free Cash Flow $36.6M, Revenue growth N/A, FCF margin 568.0%, Gross margin 95.4%, ROIC 470.8%, Total Debt to Equity 248.8%. 1Y Return 0.8% suits early-stage AI commerce.
RZLV analysis for high-quality speculative picks.
Key Catalysts
- Perfect 10.0 Quality rating.
- Exceptional 95.4% gross margin.
- AI commerce platform potential.
- Emerging revenue traction.
Risk Factors
- Extreme 568.0% FCF margin negative.
- 470.8% ROIC burn rate.
- Tiny $6,451.3K revenue base.
Stock #9: Rackspace Technology, Inc. (RXT)
| Metric | Value |
|---|---|
| Market Cap | $149.1M |
| Quality Rating | 4.4 |
| Intrinsic Value | $36.1 |
| 1Y Return | -74.3% |
| Revenue | $2,688.5M |
| Free Cash Flow | $69.0M |
| Revenue Growth | (3.0%) |
| FCF margin | 2.6% |
| Gross margin | 19.3% |
| ROIC | (4.9%) |
| Total Debt to Equity | (38.9%) |
Investment Thesis
Rackspace Technology, Inc. (RXT), Market Cap $149.1M, Quality rating 4.4, intrinsic value $36.1. Revenue $2,688.5M, Free Cash Flow $69.0M, Revenue growth 3.0%, FCF margin 2.6%, Gross margin 19.3%, ROIC 4.9%, Total Debt to Equity 38.9%. 1Y Return -74.3% flags distressed AI hosting value.
RXT analysis for turnaround stock watchlist.
Key Catalysts
- $2,688.5M revenue scale.
- Positive $69.0M free cash flow.
- AI cloud hosting demand.
- Low valuation entry point.
Risk Factors
- Poor 19.3% gross margin.
- Steep -74.3% 1Y Return.
- Negative 3.0% growth.
Stock #10: Airship AI Holdings, Inc. (AISP)
| Metric | Value |
|---|---|
| Market Cap | $98.9M |
| Quality Rating | 5.9 |
| Intrinsic Value | $252.9 |
| 1Y Return | -32.4% |
| Revenue | $8,710.0K |
| Free Cash Flow | ($4,504.5M) |
| Revenue Growth | (63.8%) |
| FCF margin | (51,716.7%) |
| Gross margin | 24,567.5% |
| ROIC | 52.8% |
| Total Debt to Equity | (2.4%) |
Investment Thesis
Airship AI Holdings, Inc. (AISP), smallest at Market Cap $98.9M, Quality rating 5.9, striking intrinsic value $252.9. Revenue $8,710.0K, massive negative Free Cash Flow $4,504.5M, Revenue growth 63.8%, FCF margin 51,716.7%, outlier Gross margin 24,567.5%, ROIC 52.8%, Total Debt to Equity 2.4%. 1Y Return -32.4% screams high-volatility AI edge play.
AISP analysis for extreme investment ideas.
Key Catalysts
- Huge $252.9 intrinsic value upside.
- 52.8% ROIC efficiency.
- Elevated 24,567.5% gross margin anomaly.
- AI video analytics niche.
Risk Factors
- Catastrophic $4,504.5M free cash flow.
- 63.8% revenue decline.
- Extreme 51,716.7% FCF margin negative.
Portfolio Diversification Insights
These 10 AI software stock picks cluster in technology, specifically pure-play AI, offering sector allocation from large-cap stability (PLTR, SNOW, MDB at 70%+ of total market cap) to small-cap/high-upside (RZLV, RXT, AISP). Pair high-quality leaders like PLTR (8.1 rating) with value plays like AISP ($252.9 intrinsic) for balance. Diversify by market cap: 50% mega/mid (PLTR-SNOW), 30% mid-small (PATH-OTEX), 20% micro (RZLV-AISP). Cross-references show margin leaders (PLTR 80.8%, PATH 83.2%) offsetting cash-burners (AI, RZLV), reducing volatility while capturing AI growth themes like data platforms and automation.
Market Timing & Entry Strategies
Consider entry during AI sector pullbacks, targeting stocks with intrinsic value above current implied prices like MDB $203.4 or AISP $252.9. Monitor revenue growth trends—favor PLTR's 47.2% for momentum, PATH's positive ROIC for stability. Use dollar-cost averaging for volatile small-caps (RZLV, AISP), entering on dips below 20% from 52-week highs. Track FCF improvements quarterly; position sizing: 10-20% per stock max, rebalance on Quality rating shifts.
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FAQ Section
How were these stocks selected?
These 10 best stock picks were curated from ValueSense data using intrinsic value, Quality rating, revenue growth, margins, ROIC, and low debt, focusing on pure-play AI software for undervalued stocks to buy.
What's the best stock from this list?
PLTR leads with 8.1 Quality rating, 47.2% revenue growth, 76.6% ROIC, and $349.5B cap, though RZLV's 10.0 rating offers speculative appeal—assess via individual stock analysis.
Should I buy all these stocks or diversify?
Diversify across market caps and metrics (e.g., PLTR for stability, AISP for upside) rather than buying all, allocating by risk tolerance in this stock watchlist.
What are the biggest risks with these picks?
Key concerns include negative ROIC/FCF in growth names (AI -234.5% ROIC, AISP extreme margins), revenue declines (RXT -3.0%), and debt (SNOW 122.0%)—review risk factors per stock.
When is the best time to invest in these stocks?
Target AI market dips, positive FCF inflection, or intrinsic value discounts; use Market Timing strategies like averaging into high-conviction picks like MDB or PATH.