It’s no surprise that software stocks have taken a breather in the stock market so for this year. In turn, this could make software stocks an attractive option in the stock market now as valuations have fallen across the sector. In general, software continues to play a key role in the tech industry as a home for businesses with generally higher business margins.
Suitably, this is in large part due to the emerging Software-as-a-Service (SaaS) business model. In detail, companies can offer digital products & services across multiple industries. There is also an increasing demand for SaaS offerings connected with cloud computing, digital transformation, big data analytics, and artificial intelligence. Because of all this, I could understand investors are turning their attention to software stocks now. If you are keen on investing in the sector, here are four top software stocks to watch in the stock market today.
Top Software Stocks To Buy [Or Avoid] Now
- Salesforce Inc. (NYSE: CRM)
- Datadog Inc. (NASDAQ: DDOG)
- Sofi Technologies Inc. (NYSE: SOFI)
- Adobe Inc. (NASDAQ: ADBE)
Salesforce (CRM Stock)
First, let’s look at enterprise software company Salesforce (CRM). In brief, this is a customer relationship management software company that provides enterprise applications focused on customer services. Also, its software is used for application development, analytics, and marketing automation, and others. The company reports having more than 150,000 companies use its software to grow their businesses. Over the last month of trading, CRM stock has rallied by over 10%.
Recently, the company announced it has been recognized by Gartner as a Leader in its 2022 Magic Quadrant for Multichannel Marketing Hubs. “In today’s digital-first world, customers expect personalized experiences from companies at every touch point,” stated Lidiane Jones, EVP & GM, Salesforce Digital Experiences. “Salesforce Marketing Cloud allows marketers to know their customers, humanize every moment, and optimize outcomes — building trusted relationships at scale.”
With that, Salesforce is set to report its second quarter fiscal year 2023 results on Wednesday, Aug. 24, 2022, after the close of the market. With such excitement surrounding the company, will you make space for CRM on your watchlist?
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Datadog Inc. (DDOG Stock)
Next, let’s check out Datadog Inc. (DDOG) As a whole, the company focuses on providing cybersecurity software services. Through its cutting-edge monitoring and security platform, Datadog mainly focuses on protecting cloud applications. In detail, the company’s services assist organizations by facilitating safe and efficient cloud migration, collaborative development efforts, and digital transformation.
Shares of DDOG have increased by over 20% over the last five trading days. Back in May, the company reported its first quarter financial results. In it, Datadog posted reported earnings of $0.21 per share on revenue of $363.0 million for the quarter. Previously, the company said it anticipates second quarter non-GAAP earnings of $0.13 to $0.15 per share on revenue of $376.0 million to $380.0 million. Wall street’s current consensus earnings estimate is $0.12 per share on revenue of $361.60 million for the quarter.
What’s more, Datadog is reporting its second quarter fiscal year 2022 financial results before the U.S. financial markets open on Thursday, August 4, 2022. Do you think Datadog is a buy in the stock market now?
Sofi Technologies Inc. (SOFI Stock)
Following that, let us look at the digital personal finance company, SoFi Technologies (SOFI). In brief, the company operates through three business segments, Lending, Financial Services, and Technology Platform. SoFi believes that it can help people achieve their financial independence through its products and services. As a matter of fact, the company just announced its second quarter 2022 results.
Diving in, SOFI posted a loss of $0.12 per share on revenue of $389.3 million. For context, Wall Street’s consensus estimate was a loss of $0.12 per share on revenue of $349.4 million. As a result, revenue increased by 50.1%year-over-year for SoFi. Additionally, the company reported it projects the full year 2022 revenue of $1.508 billion to $1.513 billion. The company’s previous guidance was 2022 revenue of $1.505 billion to $1.510 billion, versus the current consensus revenue estimate of $1.50 billion for the year.
“We delivered another quarter of great results with robust growth in members, products, and cross-buy. We generated record adjusted net revenue, which was up 50% year-over-year, and our eighth consecutive quarter of positive adjusted EBITDA, which doubled sequentially. While the political, fiscal, and economic landscapes continue to shift around us, we have maintained strong and consistent momentum in our business. We built our products and services to provide durable growth and profitability, and that is what we are delivering,” stated Anthony Noto, CEO of SoFi Technologies, Inc. Following this news, shares of SOFI stock jumped over 28% on Thursday.
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Adobe Inc. (ADBE Stock)
Last up, we have a leading developer of desktop publishing software, Adobe. In general, a significant percentage of its sales come from three of the company’s software products, Photoshop, Illustrator, and PageMaker. Additionally, the company has also developed and distributed Acrobat Reader, a software to view and print portable document formats (PDF) for its users. After this, the company’s latest offering is the Adobe Document Cloud. In summary, the software products help make a digital workspace for collaboration and communication.
In June, Adobe reported a beat for its second quarter fiscal 2022. Diving in, the company posted earnings per share of $3.36 on revenue of $4.4 billion. This beat analyst expectations of $3.31 per share on revenue of $4.3 billion. However, Adobe did provide lower guidance for the quarter. Specifically, the company said it estimates third-quarter non-GAAP earnings of approximately $3.33 per share on revenue of approximately $4.43 billion. This is compared to the current consensus earnings estimate of $3.40 earnings per share on revenue of $4.51 billion for the quarter.
“Adobe achieved record Q2 revenue with strong demand across Creative Cloud, Document Cloud and Experience Cloud,” quoted Shantanu Narayen CEO of Adobe. “We are winning in our established businesses and seeing significant momentum in new categories from content authoring for a broad base of creators to PDF functionality on the web to the leading real-time customer data platform for global enterprises.” Is this enough for you to add ADBE stock to your radar today?