Should Investors Be Adding These Top Software Stocks To Their Watchlists?
Software stocks had a fantastic year on the stock market in 2020. After all, the sector outperformed the S&P 500, showing its best performance in the last few years. The source of this massive success is undoubtedly thanks to the rising demands for software services throughout the year. Companies flocked to the top software stocks in 2020 because of the sudden digital acceleration movement fueled by the pandemic. Similarly, investors tuned their radars to the software sector and have seen massive returns because of this.
Since 2020, Zoom (NASDAQ: ZM) and The Trade Desk (NASDAQ: TTD) have become some of the best tech stocks in the stock market today. The two have effectively become essential services for countless companies throughout the pandemic. Zoom has been adopted as a key communications platform while Trade Desk has become a go-to for digital advertising needs. Chances are, as the pandemic shows no signs of slowing, this could be the status quo for a while. Because of this, I’m not surprised that investors would be keen to bank on the current success of the software industry as a whole.
All this is great for software investors as it stands, but for new investors looking for points of entry, it could seem intimidating. Well, given that the sector is constantly evolving, there are often new emerging software companies. What’s important is that investors do their research and keep up with the latest movers in the industry. In line with that, do you have these top software stocks on your 2021 watchlist?
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Best Software Stocks To Watch Now
- PAR Technology Corporation (NYSE: PAR)
- CleanSpark Inc. (NASDAQ: CLSK)
- Palantir Technologies Inc. (NYSE: PLTR)
PAR Technology Corporation
Global point of sale (POS) software provider PAR has been in the limelight lately. To point out, PAR stock jumped by over 12% during Wednesday’s trading session hitting a new all-time high as well. For some context, the company develops and markets hospitality-based operation solutions for the restaurant industry. The company has over 95,000 installations across 110 countries globally. Regarding the restaurant business, PAR’s latest client could be the reason why investors are watching it closely right now.
Just yesterday, the company announced that CKE Restaurants Holdings will be a new client. CKE which operates the Carl’s Jr. and Hardee’s brands is turning to PAR for its cloud-based software. This will entail PAR providing cloud services for CKE’s corporate-owned restaurants and select franchisee restaurants. PAR CEO Savneet Singh said, “We are pleased that CKE chose PAR’s Brink POS® and its open platform to power their demanding store operations and as the foundation of their commitment to ongoing innovation.” With implementation set to begin from now till the end of the year, it seems to be an exciting time for PAR stockholders.
In its recent quarter fiscal, the company reported earnings of $54.8 million in total revenue. Following that, it also ended the quarter with $55.7 million in cash on hand. Singh said, “Our results in Q3 highlight the resiliency of the restaurant industry and importantly the acceleration in cloud adoption. Q3 bookings were the most we’ve seen in almost three years and highlights how quickly enterprise restaurants are reacting during the Covid-19 pandemic. As the world stabilizes, we expect activations and bookings to continue to grow.” With restaurant chains seemingly rebounding, investors may be looking at PAR stock in terms of long-term growth. Could this mean big gains for PAR stock this year?
Solar software solutions company CleanSpark is another top software stock to watch right now. The software and service company provides microgrid and energy resource management solutions across various markets. Given the current renewable energy tailwinds, the company seems well-positioned to make the most of the current trends. CLSK stock seems to reflect this as it sits at gains of over 680% in the past year.
On the financial front, CleanSpark appears to be making strides as well. In its fiscal year 2020 report, it more than doubled in annual revenue year-over-year. Impressively, this marked the third consecutive year of triple-digit annual revenue growth for the company. CEO Zach Bradford explained, “This was an excellent year for CLSK, despite challenging economic conditions resulting from the COVID-19 pandemic. Fortunately, the impact of the COVID pandemic on CleanSpark has been relatively minimal to date.” Bradford cites the company’s focus on delivery consistency, increased sales efforts, and product enhancements as key contributors to this growth. Despite its stellar year, CleanSpark does not seem to be resting on its laurels just yet.
Just yesterday, it announced the addition of another residential microgrid contract into its portfolio. Through the agreement, CleanSpark will deliver energy modeling, analytical services, and storage solution implementation in an all-in-one microgrid package. Customer Frank Huerta commented, “The single greatest value, for us, is to have the confidence and security that our home is not subject to unpredictable energy interruptions that are beyond our control…you really can’t put a price on that. We plan to someday expand this system to fully disconnect our home from the utility connection.” It seems that CleanSpark delivers quality and its customers are satisfied. Will CLSK stock benefit from this in the long run? Your guess is as good as mine.
Palantir Technologies Inc.
Following that, we have software titan Palantir. The big data-analytics specialist has made waves on the stock market since its initial public offering back in September 2020. At the moment, PLTR stocks are sitting on gains of over 160% since then. Even Jefferies analyst Brent Thill hailed the company behind it as “best-of-breed” and predicts annual sales growth of 30% for the foreseeable future. For one thing, Palantir provides scalable and affordable big-data solutions for some major clients. These include the U.S. Department of Defense and the U.K.’s National Health Service. In light of all the current hype around PLTR stock, investors might be wondering if it still has room to grow.
In its third-quarter fiscal posted in November, the company reported a phenomenal 52% leap in total revenue year-over-year. Adding to that, the company also ended its quarter with $1.8 billion in cash on hand and raised its full-year 2020 revenue guidance. Evidently, Palantir seems confident about its performance moving forward. That’s understandable with its powerful clients and solid financials. But, considering how reliant the company is on contracts, investors would be more concerned about its latest moves.
Well, fret not. Palantir seems to have no plans of slowing down anytime soon as it has just signed another contract with the U.S army. In brief, the company was selected to deliver a prototype for the army’s Ground Station modernization initiative. This will be in support of its targeting systems program known as TITAN. For now, the TITAN contract holds a value of $8.5 million in the first phase. If Palantir plays its cards right, it could be up for the $250 million overall payouts across the project’s four phases. All things considered, will you be adding PLTR stock to your watchlist?