The rapidly changing tech space is exploring new avenues to boost revenues by utilizing digital innovations to facilitate innovation and change. Despite high inflation and the Fed’s hawkish stance, software stocks have gained investors’ attention of late due to their solid growth prospects.
Therefore, investors could consider buying fundamentally strong software stocks GoDaddy Inc. (GDDY), CSG Systems International, Inc. (CSGS), and Sapiens International Corporation N.V. (SPNS).
The tech sector has not only survived but also thrived despite the disruptions caused by the strong macroeconomic headwinds over the past year. The pandemic-induced challenges have forced many companies to adopt new digital strategies and drastically alter their work models. Moreover, with the likelihood of the Federal Reserve easing up on interest rate hikes in sight, the industry is poised to see impressive growth.
Software has become the prime focus of technological innovation through constant evolution. Apart from running devices and applications, it has been gaining immense traction from the ongoing cloud transition. Remote working, learning, and diagnosis have also boosted the demand for software applications.
The industry seems to be at a bright spot, given the higher spending by enterprises on software procurement. Gartner, Inc. (IT) forecasted global IT spending to reach $4.6 trillion in 2023, reflecting an increase of 5.5% from 2022.
Given the current market uncertainties, the companies in this space are focusing on maximizing profits, retaining customers, and improving efficiency by implementing strategies like staff reductions and redirecting resources towards core business areas. The software market’s revenues are projected to reach $659 billion in 2023.
Furthermore, the global enterprise software market is projected to reach around $610.09 billion by 2032, poised to grow at a CAGR of 11.7% during the forecast period between 2023 and 2032.
Given this backdrop, it could be wise to invest in GDDY, CSGS, and SPNS to position yourself for solid returns in the future.
GoDaddy Inc. (GDDY)
GDDY engages in the design and development of cloud-based technology products. It operates through two segments: Applications and Commerce; and Core Platform. The company provides cloud-based solutions to individuals, businesses, and organizations to establish an online presence, connect with customers, and manage their ventures.
On May 1, the company teamed up with Microsoft to enable seamless payments over virtual meetings for small, service-based businesses. This expansion to Teams’ meetings aligns perfectly with GDDY’s vision of building a commerce platform that allows entrepreneurs to transact from anywhere.
On February 23, GDDY announced the launch of Payable Domains, which allow small business owners to register a new domain and easily accept payments from customers. This latest innovation strengthens the company’s suite of connected commerce tools that empower entrepreneurs with everything they need to scale their businesses.
