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4 Top Software Stocks To Watch This Upcoming Week
We live in a world where software is the driving force in powering our increasing dependence on technology and digitalization. As a result, investors would turn to software stocks when looking for long-term gains in the stock market. It is a given that software companies would constantly be improving their offerings to keep up with the latest tech. Hence, there would be more than sufficient news from the sector to keep investors interested moving forward. After all, the sector comprises some of the largest companies in the world.
Major companies from other sectors would often rely on software companies to improve their services. For instance, Morgan Stanley (NYSE: MS) and Microsoft Corp (NASDAQ: MSFT) announced on Wednesday a strategic cloud partnership aimed at accelerating the former’s digital transformation. Microsoft’s cloud provides a specific view of the challenges of financial services and allows Morgan Stanley to accelerate the modernization of its IT environment. With companies and investors alike eyeing the lucrative software industry now, the hype could be justified. With that in mind, let’s look at some of the best software stocks in the stock market today.
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Let us start the list with the cloud software company, Oracle. The company provides products and services that address enterprise information technology environments worldwide. Its businesses include cloud and on-premise software, hardware, and services. ORCL stock has been on an upward trajectory for the past few years. In fact, it is at its all-time high price and is up by over 50% year-over-year.
On Thursday, the company announced that its fourth-quarter fiscal 2021 earnings report will be set for June 15, after the market closes. So far, the company has been doing quite well on the financial front. For the three months ended February 28, 2021, the company’s revenues increased by 3% year-over-year to $10.1 billion. Meanwhile, non-GAAP net income was up by an impressive 10% to $3.5 billion. Investors would be on the lookout to see if Oracle could keep up its impressive numbers thus far.
Back in May, the company also announced that its first Arm-based compute offering, OCI Ampere A1 Compute, is now available on Oracle Cloud Infrastructure (OCI). What this means is, customers can now run cloud-native and general-purpose workloads on Arm-based instances with better price-performance benefits. Given ORCL stock’s bullish momentum, would it be worth adding to your watchlist?
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Next, we have a diversified software company, Adobe. It operates through three segments, Digital Media, Digital Experience, and Publishing. The company’s flagship product is Creative Cloud, a subscription service that allows customers to download and access the latest versions of its creative products. For example, you could take your new ideas to new places with Photoshop on the iPad, draw and paint with Fresco, and many more.
On Thursday, the company announced the appointment of David Wadhwani as executive vice president and chief business officer, Digital Media. In this role, Wadhwani will be responsible for the success of Adobe’s Digital Media business. The company president and CEO, Shantanu Narayen has this to say after the appointment, “We’re thrilled to welcome David back to Adobe to lead our Digital Media business. He is a transformational leader with an exceptional record of operational excellence, innovation, and growth.”
The company has also raised its annual targets based on its impressive first-quarter financial results which were announced back in March. It reported a record quarterly revenue of $3.91 billion, up by 26% year-over-year. Meanwhile, GAAP net income came in at $1.26 billion. These are exciting times for the company based on the tremendous opportunities across its businesses. With that in mind, would you consider adding ADBE stock to your watchlist?
McAfee Corp. is a global computer security software company headquartered in Santa Clara, California. Its personal protection service provides digital protection of the individual and family under the Total Protection and LiveSafe brands. Meanwhile, its device security services include its anti-malware software and secure home platform products. These solutions protect devices from viruses, ransomware, malware, spyware, and phishing.
MCFE stock is yet another software stock that is trading at its all-time high. Impressively, the stock has risen over 55% since the start of the year. Furthermore, its financial results have also been healthy. In its first-quarter earnings report, the company posted revenue of $442 million, reflecting a 25% growth year-over-year. Also, net income came in at $83 million or a net income margin of 19%. This shows that the company can secure its customer’s ever-increasing digital footprint as people are living more of their lives online.
Back in May, the company announced a significant expansion of its MVISION Extended Detection and Response (XDR) solution. This is achieved by correlating the extensive telemetry of McAfee’s endpoint security solution, Secure Access Service Edge (SASE) solution, and threat intelligence solution. These integrations would protect organizations against the most advanced threats while simplifying security operations. All things considered, will you consider MCFE stock as a top software stock to watch?
To sum up the list, we have the Dutch information technology company, Elastic. The company offers developers the Elastic Stack, a set of software products for data search and management, namely Elasticsearch, a real-time search and analytics engine and datastore for all types of data. ESTC stock has been up by approximately 18% over the past month after having a rough start to the year.
The stock soared by 10% on Thursday in response to its financial earnings report. For the full fiscal 2021, total revenue was $608.5 million, up by 42% year-over-year. Out of which, Software as a Service (SaaS) revenue was $166.3 million, an increase of 80% for the year. This marks an exceptional year for the company, largely due to the continued adoption of Elastic Cloud and broad-based demand for its search, and security solutions.
Elastic also announced a new update across its Elastic Security solution in late May. In the 7/13 update, it broadened support for osquery, the open-source host instrumentation framework, with a new host management integration for Elastic Agent. That enables security teams to use osquery results to address cyber threats. Across the board, it appears that the company is showing encouraging signs of moving forward. So, would this be an opportunity to buy ESTC stock?