Because of the increasing reliance of enterprises on software solutions, the software industry is poised for significant growth. Technological advancements are strengthening the industry even more by encouraging innovation, improving development processes, and enabling the creation of immersive, interconnected experiences.
To that end, it could be wise to invest in fundamentally sound software stocks, Microsoft Corporation (MSFT), ServiceNow, Inc. (NOW), and RingCentral, Inc. (RNG), that hold the potential to generate solid returns. Let’s understand this in detail.
This year, the software industry is poised for robust growth as businesses prioritize spending on software-driven transformation initiatives to gain a competitive edge through increased productivity and automation.
The industry’s standout trend lies in software development companies’ escalated adoption of cloud-native solutions, empowering application development, team management, and communication. These infrastructure-independent solutions function seamlessly across various servers, ensuring effortless integration for any company.
Moreover, technologies such as AI, cybersecurity, blockchain, software outsourcing, and IoT are catalyzing the industry’s expansion by driving innovation, improving security measures, enhancing development processes, and unlocking the potential for immersive, interconnected experiences.
On that note, Gartner forecasts worldwide software spending to reach $911.66 billion in 2023, registering a 13.5% year-over-year increase. Meanwhile, according to Spherical Insights, the global enterprise software market is expected to grow at a CAGR of 11% and reach $519.88 billion by 2030.
Considering the industry’s ongoing expansion, solid software stocks MSFT, NOW, and RNG could be ideal investments for potential gains.
Let’s now delve into the fundamentals of these stocks.
Microsoft Corporation (MSFT)
Tech giant MSFT develops software, services, devices, and solutions. It operates through three segments, Productivity and Business Processes, which includes Office, Teams, and LinkedIn; Intelligent Cloud, offering public/private servers and cloud services; and More Personal Computing, encompassing Windows, Devices, Gaming, search, and ads.
On July 26, MSFT partnered with PayPal Holdings, Inc. (PYPL), integrating its Pay Later solution in multiple countries. These integrations are expected to provide flexible payment choices, fostering customer loyalty and potentially benefiting MSFT through increased sales and customer satisfaction.
