Apps & Software

Why 4 Red-Hot Software Stocks May Be Incredible Buys Before Earnings

Salesforce

This company blew away Wall Street last year with a gigantic $27.7 billion purchase of Slack Technologies. Salesforce.com Inc. (NYSE: CRM) provides enterprise cloud computing solutions, with a focus on customer relationship management to various businesses and industries worldwide.

Salesforce’s enterprise cloud computing applications and platform services include Sales Cloud, which enables companies to store data, monitor leads and progress, forecast opportunities, gain insights through relationship intelligence and collaborate around sales on desktop and mobile devices.

The company also provides Service Cloud, which enables companies to deliver personalized customer service and support, as well as connect their service agents with customers on various devices, and Marketing Cloud, which enables companies to plan, personalize and optimize customer interactions.

Top analysts feel that Salesforce remains poised to be one of the most strategic application software companies in the $1 trillion total addressable market cloud industry, with a broad and expanding platform that spans sales, service, e-commerce, marketing, business intelligence/analytics, artificial intelligence, custom applications, integration and collaboration. Many also view Salesforce as well positioned to capitalize on accelerated digital transformation spending.

The $320 Jefferies price target is well above the $274.53 consensus target. Salesforce.com stock closed at $228.76 on Monday.

Splunk

This is a top Wall Street pick in the industry. Splunk Inc. (NASDAQ: SPLK) provides a software platform for collecting, storing, indexing, searching and analyzing machine-generated data, such as log files and configuration files, which are prevalent in every type of IT system, device and application.

Splunk technology is potentially applicable and disruptive in several market segments, including IT operations, security and compliance, and business intelligence. These market segments are collectively worth $28 billion today.

Wall Street analysts agree that the company offers the de facto standard for security information and event management. It also offers orchestration solutions for security operations, a fast emerging category of products.

Jefferies has set a $265 price target on Splunk stock. The consensus target is $193.21, and shares ended Monday at $144.71.


Shares of these four top software companies are significantly cheaper now than in years past. With the market very pricey, yet still very strong, it makes sense for aggressive investors to put some chips down on these stocks that have huge upside to the Jefferies price targets. It is also important to note that three of the four stocks were up on Monday, which was an overall down day for technology.