Are These The Best Software Stocks To Buy Right Now?
Software stocks have become some of the hottest offerings in the stock market this year. Understandably, the demand for software has skyrocketed in 2020. Like it or not, software has and continues to be a crucial medium for businesses to survive in the current digital age. As companies make the push towards digital acceleration, the top software stocks have risen to the occasion to meet their needs. Several emerging players in the industry are still benefiting from this massive shift right now. To illustrate, we only need to look at the likes of Twilio (TWLO Stock Report) and The Trade Desk (TTD Stock Report). Since the March lows, TWLO stock is up by over 380% while TTD has increased by over 530%. By all means, these two companies provide value in the form of communication and digital advertising services.
Software-as-a-service (SaaS) in particular serves to provide a continuous means of support for companies who are establishing digital office spaces. In turn, this translates to more consistent streams of revenue for software companies. According to Valuates Reports, the global SaaS market alone is projected to rise to over $307 billion globally by 2026. This translates to a compound annual growth rate of 11.7% in the next six years. With such rapid growth, it is no wonder that investors are watching the best software stocks to buy so closely.
As exciting as all this may sound, investors still face the challenge of navigating this massive industry. Like most trends, any particular software can be relevant one day and obsolete the next. As such, being able to pick out the latest movers in the industry is key to building your software portfolio. In line with that, here is a list of top software stocks to watch this week.
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Top Software Stocks To Buy [Or Avoid] This Week: Pluralsight Inc
Right off the bat, we have Pluralsight (PS Stock Report). It is an online education company that offers a variety of video training courses for software developers. The company does so via its proprietary Skills and Flow products. Basically, Skills helps build relevant technology skills and Flow complements it by increasing efficiency via analytics into software development workflows. The company’s share prices have risen by over 160% in mid-March. In fact, PS stocks are up by over 12% in the past five trading sessions. Investors may be curious as to what could have caused this sudden interest.
On December 13, Pluralsight announced that it will be acquired by tech-focused investment firm Vista Equity Partners. Pluralsight’s expertise in upskilling IT professionals online synergizes well with Vista’s current direction. CEO Aaron Skonnard had this to say, “The global Vista ecosystem of leading enterprise software companies provides significant resources and institutional knowledge that will open doors and help fuel our growth. We’re thrilled that we will be able to leverage Vista’s expertise to further strengthen our market-leading position.”
It appears that the deal could be a win-win situation for both companies. For Pluralsight, it opens up a world of new clients to interact with which is always good for business. As a result, the company has likely popped up on investors’ radars. Additionally, the company reported a 20% year-over-year rise in total revenue in its most recent quarter fiscal in November. With these positive developments, would investors in PS stock rejoice?
Top Software Stocks To Buy [Or Avoid] This Week: Atlassian Corporation
Following that, we have Atlassian (TEAM Stock Report). Atlassian is an Australian software company that develops products for software developers and project managers. The company’s main products consist of team collaboration and productivity software. On top of that, Atlassian also has a cloud platform known as Jira Cloud and Atlassian Access. With such a wide portfolio, Atlassian could be gunning to be an industry leader. Likewise, its share prices reflect this as it is seeing gains of over 90% year-to-date. It is currently trading at $233.39 a share as of 11:58 a.m. ET.
In the company’s first-quarter fiscal posted in October, the company reported a revenue of $459.5 million. This is a 26% growth from a year earlier. Recently, Atlassian also announced an addition to its Jira platform in the form of Jira Service Management. The new features include on-call scheduling, alerting, and incident-swarming functionality from Atlassian’s incident management software. Head of products Edwin Wong said that organizations need “platforms that are easily accessible from anywhere. With Jira Service Management, teams and the broader organization can get visibility into work happening across the entire company.” With the growing demand for cloud services, Atlassian appears to have its focus in the right place.
Atlassian appears to be sticking to the old saying, “if it isn’t broken don’t fix it.” The company is bolstering its existing streams of profits and it seems to be working out so far. To top it all off, the company will also become a constituent of the Nasdaq-100 Index when the market opens on December 21. Ultimately the question remains, is this enough to earn TEAM stock a spot on your 2021 watchlist?
Top Software Stocks To Buy [Or Avoid] This Week: Zoom Video Communications Inc
Our last entry on the list is pandemic hero, Zoom (ZM Stock Report). The teleconferencing titan has undoubtedly changed the way we communicate this year. Through its online chat software, countless people around the globe can keep in touch with their loved ones. The company’s success has definitely manifested in its share price as ZM stock is up by over 470% this year. However, its share prices are actually down by 30% since its all-time high in October. With recent vaccine developments, investors may be concerned about Zoom’s long-term viability in a post-pandemic world. However, could this be an opportunity for investors to buy on the dip?
Fortunately, Zoom is not resting on its laurels. The company has announced the results of its collaboration with tech giant Google (GOOGL Stock Report). The smart-home interface, Google Nest Hub Max now fully supports Zoom. The rollout for this integration will be made available to Google Nest owners across the U.S., U.K., Canada, and Australia. This sets the company up just in time before the holiday seasons where the sales of smart home units could increase. With the option to hop on a Zoom call at a moment’s notice, it could make for an enticing addition to homes this Christmas.
In its recent quarter fiscal posted in December, the company reported a 367% jump in total revenue year-over-year. CEO Eric Yuan said, “We aspire to provide the most innovative, secure, reliable, and high-quality communications platform to help people connect, collaborate, build and learn on Zoom.” Will the convenience of Zoom cement its importance in the general public or will the company need to continue pushing boundaries? Regardless, time will tell if the company can keep up its momentum. Given all this, do you think ZM stock is worth investing in?