It depends on your objective. The 850 is quicker especially in turbo form, and it is made later than 1995.

If you are looking for a Volvo for reasons of longevity, the 940 has an advantage. The 940 is perhaps the best quality Volvo ever made. It had all the longevity attributes of the 240, with an improved ride, more creature comforts, and generally less failure-prone electronics.

However, the 940 is NOT trouble free. They like routine maintenance, but if you take care of the routine things, they'll last you for as long as you care to look at the car.

The 850 CAN be a good car, but it has a few softer spots than the 940 does. A couple of problem areas of earlier 850s are transmissions and timing belts. Actually the timing belt is a soft spot on all 850s, in the sense that if it breaks, you lose a lot of valves. In the 940 8-valve (not the 16v) you lose time and a little money if it breaks, but nothing more. The transmissions in the 940s are better than the 850 transmissions, and most of the peripherals (ABS modules, A/C especially) are less prone to failure.

This isn't to say the 850 isn't a good car. It really is. But it's more high-maintenance than the 940 is. And if you get a 940 Turbo, it will reward you handsomely when you step on the gas (although the 850T is more powerful still).