The software industry is a rapidly expanding industry that involves the creation, sale, and distribution of computer software programs. Many aspects of modern life rely on software, including business operations, communication, entertainment, and education. The industry includes companies ranging from large multinational corporations to small start-ups, as well as sub-sectors such as enterprise software, consumer software, and software as a service (SaaS).
Investing in software stocks provides investors with exposure to the software industry and the opportunity to profit from its growth. Shares in companies that develop or distribute software products or services are referred to as software stocks. Companies that develop enterprise software for businesses, such as customer relationship management (CRM) software or enterprise resource planning (ERP) software, as well as companies that develop consumer software products, such as video games or productivity tools, are examples of this.
Investing in software stocks can provide investors with the opportunity to earn significant returns while also gaining exposure to a dynamic and rapidly growing industry. However, as with any investment, there are risks associated with software stocks, such as changes in technology trends, competition, and economic conditions. With this being said, let’s dive into two software stocks to check out in the stock market this week.
Software Stocks To Invest In [Or Avoid] In 2023
- VMware, Inc. (NYSE: VMW)
- Snowflake Inc. (NYSE: SNOW)
VMware (VMW Stock)
First up, VMware, Inc. (VMW) is a software company that provides virtualization and cloud computing solutions. The company’s products allow businesses to run multiple operating systems and applications on a single server, which can help to improve efficiency and reduce costs. VMware’s customers include businesses of all sizes and industries, and the company has a strong presence in the cloud computing market.
Earlier in March, VMware released its Q4 2023 financial results. In detail, the company posted Q4 2023 earnings of $1.49 per share, along with revenue of $3.7 billion. This is in comparison to Wall Street’s consensus estimates for the quarter which were earnings of $1.36 per share, and revenue estimates of $3.6 billion.
Over the last year of trading action, shares of VMW stock have increased by 8.65%. Meanwhile, during Monday’s mid-morning trading session, WMW stock is trading slightly higher on the day by 0.38% at $118.09 per share.
[Read More] 3 Cyclical Stocks To Watch For March 2023
Snowflake (SNOW Stock)
Second, Snowflake Inc. (SNOW) is a cloud-based data warehousing company that provides a platform for storing, managing, and analyzing large amounts of data. Snowflake’s platform allows businesses to consolidate data from multiple sources and access it in real time, which can help to improve decision-making and efficiency. The company’s customers include a wide range of businesses, from small start-ups to large enterprises.
At the beginning of March, Snowflake also reported its 4th quarter 2023 earnings results. Specifically, the company announced a Q4 2023 loss of $0.08 per share, on revenue of $589.0 million. This is versus analysts’ consensus estimates which were $0.04 per share, on revenue of $575.0 million. As a result, revenue increased by 53.5% on a year-over-year basis.
In 2023 thus far, shares of SNOW stock are up 3.28%. Additionally, during Monday’s late-morning trading action, shares of Snowflake stock are trading higher by 6.64% on the day at $140.19 a share.
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