It comes as no surprise that software stocks continue to thrive on the stock market today. Some of the best software stocks are still riding the pandemic tailwinds even as we approach the end of February. For the most part, this is likely fueled by boosted corporate spending in the sector. This is especially clear as companies in the business of cloud computing, digital transformation, and big data analytics continue to grow their top-line revenues. No doubt, software investors have had a fantastic time on account of the massive returns from the sector. For new investors looking in, there would be one key question. That is, can the software industry maintain its current momentum?
Well, we would have to look at how some of the top software stocks are doing now to help with that. Two prime examples would be Twilio (NYSE: TWLO) and The Trade Desk (NASDAQ: TTD). Both companies posted stellar figures this week, beating consensus earnings estimates. As it stands, their shares are looking at gains upwards of 480% since the March lows. Twilio CEO, Jeff Lawson had this to say, “Companies that hired more developers and upped their digital game during the pandemic are not going back.” Time will tell if this holds to be true. Regardless, if all this has you interested in software stocks, here are four making waves now.Best Software Stocks To Watch Right Now
- CrowdStrike Holdings Inc. (NASDAQ: CRWD)
- Opera Limited (NASDAQ: OPRA)
- Brightcove Inc. (NASDAQ: BCOV)
- Dropbox Inc. (NASDAQ: DBX)
Any software investors worth their salt will be familiar with cybersecurity goliath, CrowdStrike. For the uninitiated, the company mainly provides cloud-based endpoint and workload protection via its Falcon platform. Essentially, CrowdStrike’s platform leverages artificial intelligence (AI) to protect customers against cyberattacks. More than ever, its services are seeing increased demand. This is likely due to the 2020 U.S. government hack which authorities are still working to unravel the full scope of. As a result, more organizations would likely turn to CrowdStrike to bolster their online security. Likewise, investors have also been flocking to CRWD stock which hit a new all-time high at this week’s opening bell. It has since taken a breather falling over 3.7% but the company does not seem to be resting on its laurels.
Yesterday, the company announced that it plans to acquire leading provider of high-performance cloud log management and observability tech, Humio. I’d say CrowdStrike appears to be making a solid investment through this $400 million agreement. In theory, Humio’s tech would synergize well with CrowdStrike’s “eXtended Detection and Response” (XDR) offerings. Namely, XDR helps CrowdStrike process about 5 trillion security-related events per week.Source: TD Ameritrade TOS
Once you add Humio into the mix, it can now correlate all this data to produce actionable insights and enhance real-time protection. All in all, CRWD stock could be looking at more long-term growth potential down the line. Would you agree?
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Opera is a Norwegian software company that specializes in developing web browsers. On top of that, the company is also a key player in the field of integrated AI-driven digital content discovery. With over 380 million monthly active users globally across its various browsers, Opera is no newcomer in the industry. Seeing that the general public has been using the internet more, Opera would likely be hard at work now. At the same time, OPRA stock has popped by over 46% year-to-date. In fact, the company’s shares have gained by over 8% since it launched its latest app on February 17.
Before Wednesday’s opening bell, the company announced the launch of Dify. In detail, Dify is an in-browser cashback and payments solution. According to Opera, the standalone wallet app uniquely targets “power shoppers” amidst the current e-commerce boom. Additionally, the initial app comes with an account and a free virtual Mastercard (NYSE: MA) debit card.Source: TD Ameritrade TOS
The main draw of Dify would be its e-commerce cashback feature for purchases made on partner websites on the Opera browser. In a time where people are forced to do most of their shopping online, this would incentivize the use of Opera’s browsers. Given this significant fintech expansion, do you think OPRA stock is a top software stock worth watching?Brightcove Inc.
Following that, we will be looking at Massachusetts-based software company, Brightcove. The company operates an online video platform that is mainly used by large organizations and businesses. Among its notable clientele are Johnson and Johnson (NYSE: JNJ), Ford (NYSE: F), Adobe (NASDAQ: ADBE), and HubSpot (NYSE: HUBS). In the words of Brightcove, “When video is done right, it can have a powerful and lasting effect.” This could ring true as most companies communicate to consumers through the medium of video. It is no wonder then, that companies and investors alike are turning towards Brightcove right now. Particularly, BCOV stock is looking at gains of over 330% since the March selloffs and closed yesterday within reach of its all-time high.
Accordingly, this bump does line up with the release of its fourth-quarter earnings. In it, the company posted total revenue of $53.7 million for the quarter. In terms of operational highlights, the company brought on a plethora of new customers throughout the quarter. Notably, Intel (NASDAQ: INTC) was one of them.Source: TD Ameritrade TOS
CEO Jeff Ray mentioned that Brightcove saw its fastest organic revenue growth and strongest free cash flow in the quarter. Not to mention, the company also expanded its core platform to include cloud-based services just last week. It seems that Brightcove has no plans of losing its current momentum. Could BCOV stock follow suit? You tell me.Dropbox Inc.
Another software company in the limelight right now would be Dropbox. In brief, the company operates via its file hosting service of the same name. Through its Software-as-a-Service (SaaS) business, Dropbox offers cloud storage, file synchronization, personal cloud services, and client software. Since countless organizations are making the shift towards remote work, there could be rising demand for Dropbox’s services. However, DBX stock has been trading sideways for the most part with year-to-date gains of over 10%. Given its solid fiscal 2020 results posted yesterday, could it be undervalued?
To begin with, Dropbox posted total revenue of $1.9 billion for the fiscal year. Furthermore, it also surpassed $2 billion in total annual recurring revenue. Considering that it also made a sizable shift towards remote work in the quarter, these results speak volumes to Dropbox’s resilience.Source: TD Ameritrade TOS
As it stands, DBX stock has a market cap of over $10 billion. This would place it at a trailing twelve-month price-to-sales ratio of about 5.26 as of Thursday’s closing bell. Compared to its other cloud and enterprise software peers, it seems to be selling at an attractive price. Given all of this, will you be adding DBX stock to your watchlist?