4 Software Stocks To Consider Adding To Your Watchlist In September 2021
When looking for the top stocks to buy in the stock market, software stocks are often on the radar of many investors. With the pace of change in the industry, software companies are willing to spend billions of dollars to upgrade and improve their offerings to cement their position. Yesterday, Bloomberg reported that financial software company Intuit (NASDAQ: INTU) entered talks with Mailchimp to buy the marketing firm for more than $10 billion. If the deal materializes, it would unite two providers of services for small businesses. Also, it would be the largest acquisition made by Intuit after it paid $7.1 billion for Credit Karma last year.
Even gadgets known for their sleek hardware need dependable software to function well. For example, Apple’s (NASDAQ: AAPL) Macbooks and iPhones look astonishing on the outside with their designs. However, without software, they would just be nice pieces of metal. Overall, as software continues to play an important role, companies are also aggressively improving their offerings. Now, would a list of the top software stocks in the stock market today be of your interest?
Best Software Stocks To Buy [Or Sell] In September 2021
- Microsoft Corporation (NASDAQ: MSFT)
- Unity Software Inc (NYSE: U)
- Docusign Inc (NASDAQ: DOCU)
- MicroStrategy Incorporated (NASDAQ: MSTR)
To start off the list, we will be looking at the software giant that needs no introduction, Microsoft. The leading global software company broke into the scene back in the 1980s with its Windows operating system. Since then, the company never looked back and is now one of the largest tech companies in the world. Even now, the company continues to grow and its stock has risen over 35% since the start of the year.
Yesterday, Microsoft finally announced the highly anticipated release date of its Windows 11. Eligible Windows 10 personal computers (PC) will receive a free upgrade to Windows 11 beginning October 5, 2021. Meanwhile, PCs that come preloaded with Windows 11 will start to become available for purchase. This is a significant rollout as analysts estimate that it may contribute up to 19% of Microsoft’s overall profit margins this year.
The new operating system will be equipped with a new Microsoft Store for apps and games. This release would put pressure on competitor Apple as it plans to take a 15% cut, as opposed to Apple’s standard 30% share from developers for apps on its platform. Also, Microsoft claims that this update would be the best Windows ever for gaming as it unlocks the full potential of your system’s hardware. Safe to say, these are all exciting developments for the company in the coming months. So, would you consider adding MSFT stock to your portfolio?
Unity Software Inc
Following that, we will be looking at Unity. Gaming enthusiasts would be no stranger to the company. But for those unfamiliar, the company has a platform for creating and operating interactive, real-time three-dimensional content. The content made with Unity is real-time, allowing it to adapt to user’s behavior and feedback. U stock has risen over 85% over the past year.
Last week, Unity announced the acquisition of OTO. The company is an AI-driven acoustic intelligence platform that helps build and foster safer gaming environments with voice and text chat environments. The rise of toxic behavior which leads to poor player experience has caused lost revenue for game creators. So, OTO will be integrated into Unity’s Vivox platform to solve this problem. Now, this would empower creators with a scalable solution to design safe virtual environments that promote friendly experiences.
During Unity’s second quarter, it posted revenue of $273.6 million, up by 48% from the prior year’s quarter. This marks the 11th consecutive quarter where the company posted 30% or more growth as the company crosses $1 billion in annual revenue run rate. All things considered, is U stock a top software stock to buy for you?
DocuSign is a software company that helps organizations connect and automate how they prepare, sign, and manage agreements. With the company’s DocuSign Agreement Cloud, agreements can be signed electronically on a variety of devices. By eliminating paper for agreement, DocuSign is shortening the period to complete agreements and increase the efficiency of any business agreements.
Earlier this week, DocuSign hired Google Cloud and Oracle (NYSE: ORCL) veteran, Ed Knott, to lead its Australia and New Zealand business. Now, Mr. Knott will take on the role of area vice president for the region. In the past, he has spent nearly 10 years at Oracle in a variety of customer-facing roles. Then he proceeded to assume leadership roles at Google, where he played a role in growing the Google Cloud Australian business. DocuSign hopes that the new hiring will propel growth in the region.
Financially, the company has also been firing on all cylinders. During its first quarter, the company’s revenue came in at 58% higher year-over-year to $469.1 million. Furthermore, it continues to generate cash, with an operating cash flow and free cash flow rising 129% and 275% respectively. With the digitalization of the world well underway, it could benefit DocuSign in the long term. With all said and done, would you bet on the future of DOCU stock ahead of its earnings report scheduled to be released on September 2?
Last but not least, we have MicroStrategy. Essentially, the company is a provider of enterprise software platforms around the world. It engages in the design, development, marketing, and sales of its software platform through licensing arrangements, and cloud-based subscriptions, and related services. MSTR stock has been up by over 350% over the past year.
Late in July, the company announced its second-quarter financial results. It continues to deliver outstanding operational performance across the board. The company had one of its best operational quarters in its software business. This was highlighted by its revenue of $125.4 million, representing a growth of 13.4% year-over-year.
More recently, CEO Michael Saylor announced in a tweet that the firm had purchased additional bitcoins for about $177 million in cash. He also highlighted that the firm now holds nearly 109,000 bitcoins that were acquired for about $2.918 billion. The company intends to continue to deploy additional capital into its digital asset strategy as it has been yielding satisfactory results. With that in mind, do you agree with the company’s growth strategies? If you do, would you consider investing in MSTR stock?
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.