3 No-Brainer Stocks to Buy in Tech

3 No-Brainer Stocks to Buy in Tech

Posted On May 20, 2020 7:37 pm

The coronavirus has thrown some businesses into crisis mode. Brick-and-mortar retail shops, airlines, and restaurants are all trying to figure out how to survive during this challenging time.

But many technology companies seem to be immune from this pandemic and are attracting more customers as enterprises look to enable their now-remote workforces. Three no-brainer tech stocks that are poised to benefit as companies accelerate plans for a cloud-based digital future are Veeva Systems (NYSE:VEEV)Okta (NASDAQ:OKTA), and Arista Networks Inc (NYSE:ANET).

Veeva: Cloud software for life sciences

As cloud software started to become mainstream, Veeva CEO and co-founder Peter Gassner realized that there weren’t quality software solutions for the highly regulated life sciences industry, so he started the company in 2007. Since then, it’s become a $1.1 billion revenue run-rate business focused on life science customers, and it’s now using its expertise to move into new regulated-industry verticals. The company has set a course to achieve $3 billion in annual revenues by 2025 and has plenty of optionality to make that happen.

Veeva has two primary products that span the enterprise: Commercial Cloud and Vault. Its commercial product helps its sales team manage all of its external relationships while staying compliant with industry regulations. Vault helps the company develop and manage the product life cycle from initial concept to supporting it in the field with customers. This end-to-end modular platform allows customers to start a small trial in an area that most needs the software. After a successful pilot, it can expand to other modules over time.

As life sciences companies move to more remote work, the need to digitize critical processes should become a priority, and that puts this stock on the no-brainer list.

Okta: Accessing cloud apps has never been easier

Okta was born during the last financial crisis in early 2009. The cloud was becoming the way software would be delivered to users, and this was upending the standard “behind our firewall” enterprise secure-network architecture. As business teams began to adopt cloud-based productivity tools, it was more difficult for information technology (IT) teams to manage who could access what. Add in complexities of remote employees, contract workers, and external consultants who all need system access, and the problem became almost unmanageable. Okta’s identity-management software was built specifically for this situation.

Okta’s platform allows authorized users to log in one time and have a dashboard of all the applications they need to get through the day. The workforce loves the one-stop-shop for software tools, and the IT teams love the centralized control that keeps out bad actors. This solution has attracted 7,950 customers, of which 1,467 pay more than $100,000 per year in subscription fees.

The company’s revenue has more than doubled in the last two years to $586 million, and its impressive 119% revenue retention rate is a sign that customers are sticking around. Add in security concerns for IT shops with more employees working remotely than ever before, and this stock becomes a no-brainer.

Arista Networks: More bandwidth for cloud applications

Arista Networks started in 2004 to address the limitations of legacy hardware in network data centers. It sells switches and routers to control network traffic, but its secret sauce is its operating system that allows the network to be configurable to grow with demand, have high availability, and provide real-time visibility to the data center traffic. The company has taken significant market share from the networking giant Cisco to grow to an annual $2.3 billion business.

But Arista Networks is really just getting started. It’s achieved market leadership in the 100-gigabit ethernet data centers but has a full lineup of products ready for  customers when they want to upgrade to the faster 400-gigabit speed. Over the next four years, the 400-gigabit ethernet technology is expected to become the predominant standard for data centers.

But with the coronavirus pandemic in full swing, enterprises are delaying capital expenditures, and Arista’s experiencing some…

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