Are These The Best Software Stocks To Invest In Now?
No matter how you look at it, software is a key part of the world we live in now. Because of this, investors continue to flock towards the best software stocks despite the recent pullbacks. From the applications we use to the devices that run them, software is present. This will likely continue to be the case as the software industry continues to update and refine its offerings. Indeed, today's cutting-edge update could be next week's obsolete legacy software. As such, there is no shortage of exciting news and developments to keep investors engaged in the industry.
Just this week, Nokia (NYSE: NKE) revealed partnerships with both Microsoft (NASDAQ: MSFT) and Amazon's (NASDAQ: AMZN) cloud computing divisions. It will be employing its respective cloud software to create 5G-based enterprise software and expand the reach of its own 5G technology. In this case, software can also be a driving force for innovations across various industries. This would motivate even the top software companies to improve their existing work for the sake of staying relevant. If anything, we saw the pandemic accelerate this process last year, which benefited both software companies and investors alike. Now, even investment bank JPMorgan (NYSE: JPM) suggests that investors should rotate towards Software-as-a-Service (SaaS) companies. If all this has you interested in software stocks, here are four to watch in the stock market today.
4 Top Software Stocks To Buy [Or Sell] Now
- Unity Software Inc. (NYSE: U)
- Workday Inc. (NASDAQ: WDAY)
- CrowdStrike Holdings Inc. (NASDAQ: CRWD)
- Medallia Inc. (NYSE: MDLA)
Unity Software Inc.
Starting us off is California-based software development company, Unity. In brief, the company provides clients with a comprehensive set of cutting-edge software solutions to create, run, and monetize content. This comes in the form of 2D and 3D content for mobile devices, PCs, consoles, and even augmented and virtual reality devices. Notably, Unity's world-leading content creation platform is employed by architects, automotive designers, and game developers. With Unity at the cutting-edge of these industries, U stock would be an exciting play for software investors.
On that note, investment bank Goldman Sachs (NYSE: GS) just provided a rosy update on U stock yesterday. Analyst Christopher Merwin initiated coverage on the stock and hit it with a buy rating and $126 price target. To begin with, Merwin suggests that Unity "is driving a structural shift in the way that videogames are created." Essentially, Unity's platform allows smaller third-party developers to capture significant industry revenues. Moreover, Unity also acquired augmented reality tech company VisualLive last week. With the company seemingly gaining momentum, would now be the time to invest in U stock? I'll let you decide.
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Another top software company making waves now would be Workday. For some context, Workday provides on-demand financial and human capital management enterprise solutions. Through this SaaS model, Workday helps thousands of organizations of varying sizes optimize their financial and human resources. According to Workday, its customers range from medium-sized businesses to over 45% of the Fortune 500. With the current ongoing pandemic, companies would likely need to manage their finances and workforce more than ever. This would be where Workday's enterprise cloud solutions shine. By and large, this would make WDAY stock a go-to for investors looking to bet on rising digital acceleration trends. Likewise, WDAY stock has more than doubled over the past year.
Regardless, Workday does appear to be resting on its laurels just yet. Yesterday, the company reported seeing continued momentum in its higher education customers. Accordingly, several top universities in the country continue to rely on Workday to manage virtual deployments amidst the pandemic. This transition towards distance learning also brings a new set of issues to deal with. Thanks to Workday, institutes of higher learning can keep up with the shifting demands of faculty, students, and new regulations. All this is great, but time will tell if Workday can maintain this momentum in a post-pandemic world. In the meantime, would you consider WDAY stock a buy?
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CrowdStrike Holdings Inc.
Cybersecurity is yet another booming area of the software industry now. This would especially ring true given the massive increase in digital assets being uploaded over the past year. For investors looking to invest in this sector, most would consider leading cybersecurity firm CrowdStrike a prime candidate. For the uninitiated, the company provides endpoint security, threat intelligence, and cyber-attack response services. Given its prominent role in the developing U.S. government hack investigation, CrowdStrike remains in the spotlight. Similarly, CRWD stock is looking at gains of over 500% in the past year. With the company slated to report earnings after today's closing bell, investors would be keeping an eye on it.
Indeed, many would-be eager to see how CrowdStrike has been performing throughout this heated quarter. After all, the company provided top-line revenue estimates suggesting a 64% year-over-year jump. On top of that, CrowdStrike has been busy expanding its existing services as well. Earlier this month, it acquired leading cloud log management and observability tech company Humio. Simply put, CrowdStrike is bolstering its extended detection and response (XDR) offerings with the addition of Humio. As software continues to evolve so do cyber threats. Luckily, cybersecurity giants like CrowdStrike are also constantly improving their services as well. Does this make CRWD stock worth adding to your portfolio? You tell me.
Last but not least, we have Medallia. In short, Medallia is a leading customer, employee, citizen, and patient experience management company. Medallia mainly operates via its award-winning SaaS platform, the Medallia Experience Cloud. Through this platform, Medallia captures billions of user experience signals via a wide array of customer experience tools. In turn, the company employs its proprietary artificial intelligence (AI) and machine learning tech to provide clients with actionable insights. Ideally, these insights would then help drive positive business growth and outcomes. In an age where customer experience management is limited to the digital space, Medallia's services would be in high demand. MDLA stock trades at $28.96 as of 1:31 p.m. ET.
In terms of its financials, the company appears to be gaining momentum as well. On March 4, Medallia reported record revenue in its fourth-quarter fiscal. Specifically, the company surpassed the $100 million mark in terms of its quarterly subscription revenue. CEO Leslie Stretch cites Medallia "out-innovating" the competition as a driving factor for its recent performance. In sticking with that, Medallia also announced plans to acquire leading digital experience analytics company Decibel on the same day. That's not all, the company also unveiled a new Chief Information Officer (CIO) Insights Dashboard feature on its platform yesterday. Through this feature, CIO's can effectively measure and develop employee satisfaction levels. With Medallia firing on all cylinders, do you see MDLA stock flourishing in the near future?
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