3 Software Stocks To Buy Now And 1 To Sell

3 Software Stocks To Buy Now And 1 To Sell

Posted On September 22, 2022 1:25 pm

Continued digital transformation across sectors, increased use of data-driven solutions, and significant investments in cloud-based technologies have all contributed to the software industry’s rapid growth in recent years.

Moreover, growing emphasis on innovative technologies such as blockchain, artificial intelligence, and machine learning should further bolster the industry’s growth.

Additionally, the development of centralized infrastructure, cloud on edge, low-code, no-code, and other trends will help the industry maintain momentum. The global business software and services market is expected to grow at a CAGR of 11.7% from 2022 to 2030.

Given this backdrop, investors could consider scooping up the shares of quality software stocks Microsoft Corporation (MSFT), F5 Inc. (FFIV), and Sapiens International Corporation N.V. (SPNS).

On the other hand, with the industry grappling with rising borrowing costs owing to rapid interest rate hikes, it may be prudent to avoid ShiftPixy Inc. (PIXY) due to its unstable fundamentals.

Stocks to Buy:

Microsoft Corporation (MSFT)

MSFT is a leading American multinational technology company that creates, licenses, and sells computer software, services, electronic devices, and solutions worldwide. The business operates through three divisions: Productivity and Business Processes; Intelligent Cloud; and More Personal Computing.


Last month, Barclays PLC (BCS) and MSFT announced that Barclays had chosen Microsoft Teams as its preferred collaboration platform, enabling collaboration for over 120,000 colleagues and service partners in key locations worldwide.

Under the terms of the agreement, Barclays will streamline its existing communications and collaboration solutions, with Teams replacing several point solutions previously used throughout the company.

In July, Oracle Corporation (ORCL) and MSFT jointly announced the general availability of Oracle Database Service for Microsoft Azure. Customers of Microsoft Azure can now easily provision, access, and monitor enterprise-grade Oracle Database services in Oracle Cloud Infrastructure (OCI) using a familiar interface.

During the fourth quarter ended June 30, 2022, MSFT’s total revenue increased 12.4% year-over-year to $51.87 billion. Its operating income increased 7.5% year-over-year to $20.53 billion. The company’s non-GAAP net income grew 14.5% from the year-ago value to $69.45 billion, while its non-GAAP EPS grew 16% from the prior-year quarter to $9.21.

Street expects MSFT’s revenues and EPS to rise 11.4% and 9.9% year-over-year to $220.87 billion and $10.12, respectively, in fiscal 2023. In addition, MSFT’s EPS is expected to rise at a 15.4% CAGR over the next five years. Moreover, the company has an impressive earnings surprise history, as it topped Street EPS estimates in three of the trailing four quarters.

MSFT’s POWR Ratings reflect this promising outlook. The company has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

MSFT also rated a B for Sentiment, Quality, and Stability. Within the Software – Business industry, it is ranked #8 of 54 stocks.

To see additional POWR Ratings for Value, Momentum, and Growth for MSFT, click here.

F5 Inc. (FFIV)

FFIV offers multi-cloud application security and delivery solutions for network applications, servers, and storage systems. Customers can develop, deploy, operate, secure, and govern applications in any architecture, from on-premises to the public cloud, using the company’s multi-cloud application security and delivery solutions.

In June, FFIV and SoftBank Corp. announced a…

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