The best growth stocks to buy now? 4 software stocks to watch out for
June 5, 2021
6 minutes to read
This story originally appeared on StockMarket
4 best software stocks to watch for this coming week
We live in a world where software drives our growing reliance on technology and digitization. As a result, investors would look to software stocks when looking for long-term gains in the stock market. It goes without saying that software companies would constantly improve their offerings to keep abreast of the latest technologies. Therefore, there would be more than enough industry news to keep investors interested in moving forward. After all, the industry includes some of the biggest companies in the world.
Large companies in other industries often rely on software companies to improve their services. For example, Morgan Stanley (NYSE: MS) and Microsoft Corp (NASDAQ: MSFT) on Wednesday announced a strategic cloud partnership to accelerate the digital transformation of the premiere. The Microsoft cloud provides a specific vision of the challenges of financial services and allows Morgan Stanley to accelerate the modernization of its IT environment. With companies and investors now eyeing the lucrative software industry, the hype might be justified. With that in mind, let’s take a look at some of the best software stocks in the stock market today.
Best growth stocks to buy [Or Sell] Now
Let’s start the list with the cloud software company, Oracle. The company provides products and services aimed at corporate IT environments around the world. Its businesses include software, hardware and cloud and on-premises services. The ORCL share has been on an upward trajectory for several years. In fact, it’s at its highest price and is up over 50% year over year.
On Thursday, the company announced that its report on its fourth quarter results for fiscal 2021 will be set for June 15, after the market closes. So far, the company is doing quite well financially. For the three months ended February 28, 2021, the company’s revenue increased 3% year-over-year to $ 10.1 billion. Meanwhile, non-GAAP net income rose 10% to $ 3.5 billion. Investors are said to be on the lookout to see if Oracle can maintain its impressive numbers so far.
Last May, the company also announced that its first Arm-based compute offering, OCI Ampere A1 Compute, is now available on Oracle Cloud Infrastructure (OCI). This means that customers can now run cloud native and general purpose workloads on Arm-based instances with better value for money. Given the bullish momentum in ORCL stock, would it be worth adding to your watchlist?
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Then we have a diverse software company, Adobe. It operates through three segments, digital media, digital experience and publishing. The company’s flagship product is Creative Cloud, a subscription service that allows customers to download and access the latest versions of its creative products. For example, you can take your new ideas to new places with Photoshop on iPad, draw and paint with Fresco, and many more.
On Thursday, the company announced the appointment of David Wadhwani as Executive Vice President and Chief Commercial Officer, Digital Media. In this role, Wadhwani will be responsible for the success of Adobe’s Digital Media business. Company President and CEO Shantanu Narayen said after the appointment: “We are delighted to welcome David back to Adobe to lead our digital media business. He is a transformational leader with an exceptional record of operational excellence, innovation and growth.”
The company has also raised its annual targets based on its impressive first quarter financial results which were announced in March. It said record quarterly revenue of $ 3.91 billion, up 26% year-over-year. Meanwhile, GAAP net income stood at $ 1.26 billion. These are exciting times for the company because of the tremendous opportunities offered by its activities. With that in mind, would you consider adding the ADBE action to your watchlist?
McAfee Corp. is a global computer security software company headquartered in Santa Clara, California. Its personal protection service provides digital protection for individuals and families under the Total Protection and LiveSafe brands. Meanwhile, its device security services include its anti-malware software and secure home platform products. These solutions protect devices against viruses, ransomware, malware, spyware, and phishing.
MCFE stock is another software stock that is trading at an all-time high. Impressively, the stock has risen by over 55% since the start of the year. In addition, its financial results are also healthy. In its first quarter earnings report, the company posted revenue of $ 442 million, reflecting 25% year-over-year growth. In addition, net income was $ 83 million or a net profit margin of 19%. It shows that the company can secure the ever-growing digital footprint of its customers as people live more of their lives online.
Last May, the company announced a significant expansion of its MVISION Extended Detection and Response (XDR) solution. This is achieved by correlating the extensive telemetry of McAfee’s Endpoint Security Solution, Secure Access Service Edge (SASE), and Threat Intelligence Solution. These integrations would protect organizations against the most advanced threats while simplifying security operations. All things considered, will you consider MCFE’s stock to be the best software stock to watch?
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To sum up the list, we have the Dutch information technology company, Elastic. The company offers Elastic Stack developers a set of software products for research and data management, namely Elasticsearch, a real-time search and analysis engine and a database for all types of data. ESTC stock has risen around 18% over the past month after a difficult start to the year.
The stock jumped 10% Thursday in response to its financial results report. For full year 2021, total revenue was $ 608.5 million, up 42% year-over-year. With Software as a Service (SaaS) revenue of $ 166.3 million, an 80% increase for the year. This has been an exceptional year for the company, in large part due to the continued adoption of Elastic Cloud and strong demand for its search and security solutions.
Elastic also announced a new update to its Elastic Security solution at the end of May. In Update 7/13, it expanded support for osquery, the open source host instrumentation framework, with a new host management integration for Elastic Agent. This allows security teams to use osquery results to deal with cyber threats. Overall, it looks like the company is showing encouraging signs of moving forward. So, would this be an opportunity to buy ESTC shares?