3 Software Stocks to Upload to Your Portfolio
The software industry should reap benefits from the ongoing digitalization of businesses. Thus, it could be an opportune time to load up quality software stocks Akamai Technologies (AKAM), Amdocs Limited (DOX), and CSG Systems International (CSGS), which are well positioned to capitalize on current trends. Keep reading….
The increasing demand for digital solutions across various sectors has contributed significantly to the remarkable growth of the software industry, making it an attractive investment opportunity. In this context, I have highlighted three fundamentally strong software stocks, Akamai Technologies, Inc. (AKAM), Amdocs Limited (DOX), and CSG Systems International, Inc. (CSGS), which could be solid buys.
With the continuation of remote work setup and the current adoption of the hybrid work model, organizations have adopted digital solutions significantly. This trend has resulted in increased adoption of cloud-based solutions, growing demand for digital transformation, and increasing focus on cybersecurity across various sectors.
Driven by these factors, the global software market is expected to grow at a CAGR of 11.5% from 2023 to 2023, reaching a market volume of $1.40 trillion by 2030. In addition, the cloud computing market is projected to surpass around $2.32 trillion by 2032, registering a CAGR of 16% from 2023 to 2032.
Furthermore, with the increasing adoption of digitalization by businesses, the global business software market is expected to register a CAGR of 11.2%, reaching $987.61 billion by the next five years.
Given these growth projections, the software industry is expected to grow steadily in the upcoming years. Hence, it could be wise to upload AKAM, DOX, and CSGS to your portfolios for solid returns in the future.
Akamai Technologies, Inc. (AKAM)
AKAM provides cloud solutions and services for securing, delivering, and computing content, applications, and software through its worldwide network of servers.
On June 21, the company was recognized as a Leader in the IDC MarketScape: Worldwide Network Edge Security as a Service (NESaaS) 2023 Vendor Assessment. The analyst firm commended AKAM’s proven track record of delivering security without performance trade-offs through its mature application security portfolio.
Further, Pavel Gurvich, Senior Vice President and General Manager, Enterprise Security at AKAM, said that this recognition reflects “how enterprises can leverage Akamai’s broad security portfolio to help them transition to a Zero Trust security architecture.”
On April 19, AKAM announced the acquisition of Neosec, an API detection and response platform based on data and behavioral analytics. With the rapidly growing API threat landscape, both companies’ combined API solutions are expected to extend AKAM’s visibility in a critical emerging category of API security for which customers actively seek support.
AKAM’s total revenue increased marginally year-over-year to $915.69 million in the fiscal first quarter (ended March 31, 2023). Net cash provided by operating activities grew 4.9% from the year-ago value to $233.49 million.
During the same period, its non-GAAP operating income and non-GAAP net income amounted to $263.84 million and 218.31 million, respectively. Also, its adjusted net income per share increased marginally year-over-year to $1.40.
The consensus EPS estimate of $1.41 for the second quarter (ending June 30, 2023) represents a 4.2% increase year-over-year. The consensus revenue estimate of $929.55 million for the current quarter indicates a 2.9% rise from the same period last year. The company has an excellent earnings surprise history, as it surpassed the EPS estimates in each of the trailing four quarters.
The stock has gained 17% over the past three months to close the last trading session at $89.35.
AKAM’s solid prospects are reflected in its POWR Ratings. The stock has an overall rating of B, which equates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
It also has a B grade for Value and Quality. Out of 50 stocks in the Software – Business industry, it is ranked #6. Click here to see the additional POWR Ratings for AKAM (Growth, Momentum, Stability, and Sentiment).
Amdocs Limited (DOX)
DOX is a provider of software and services to communications and media companies. Its offerings are based on a product and services mix, using technologies and methodologies such as 5G cloud, microservices, DevOps, open source, bimodal operations, SRE, and automation through standard IT tools, open application programming interfaces, and AI.
Recently, the company bagged the Media & Communications 2023 Microsoft Partner of the Year Award among top global Microsoft partners for demonstrating excellence in innovation and implementing customer solutions in the media and communications industry.
On June 26, DOX unveiled its…