The tech industry is one of the most exciting and fast-paced in the world. Innovations and software emerge every day, but not all tech companies are created equal. Some are worth billions of dollars, while others may be worth just a few thousand. That’s why investing in the right technology stocks is important to keep your portfolio strong and growing. Even though some software companies will have better long-term growth potential than others, that doesn’t mean you can’t invest in them – especially if you believe they’ll see an increase in popularity soon or investing heavily in AI and other technologies that will become more prevalent in the next five years. In this article, we’ll take a look at some of the best software stocks for 2022 and beyond.
PTC Inc. (PTC)
PTC Inc. is a leading provider of technology that enables businesses to design, operate, and optimize their connected products and services. Its technology creates a digital thread and end-to-end visibility throughout the product lifecycle—from design to distribution, operations, and beyond. PTC’s software and services are used for a variety of industries, including aerospace and defense, automotive, energy, industrial, logistics, and healthcare. The company has a market cap of $19.3 billion and a P/E ratio of 21.08, slightly higher than the industry average of 19.93. PTC is a play in the manufacturing segment, which is seeing a resurgence as many companies begin to develop more of their products and components domestically. PTC is well positioned to capitalize on this trend, given its presence in all aspects of the product lifecycle. The company reported revenue of $1.5 billion in the third quarter of fiscal 2020, marking a 6% year-over-year increase.
SS&C Technologies Holdings (SSNC)
SS&C Technologies Holdings is a diversified financial technology company that provides services and solutions to support clients in capital markets, insurance, and commercial finance. The company has a market cap of $25.9 billion and a P/E ratio of 16.25. The software and services segment accounted for 91% of its revenue in the third quarter of fiscal 2020, while SS&C banking services accounted for the remaining 9%. SS&C’s core offerings include investment management, accounting, and investment operations software services. In addition, it also provides investment risk, performance analytics, and portfolio management solutions for commercial finance. The company’s growth has been fairly consistent over the past five years, with a compound annual growth rate of 12.8%. SS&C’s customer base is quite diverse, which should give the company some protection in case of another economic downturn.
A10 Networks (ATEN)
Aten is a provider of intelligent networks for businesses. Its software-defined networking solutions enable communications providers and businesses to deliver services more efficiently. Its network appliances and software are used in wireless, cable, and hybrid networks. The company has a market cap of $5.56 billion and a P/E ratio of 44.51. Aten grows its business through several different means. First, it is expanding into new geographic markets, such as China and Europe. Next, it is expanding the scope of its product offerings to address a variety of industries, including healthcare and government. Finally, it is developing new applications for its products, including AI-based services. Aten reported revenue of $465 million in the third quarter of fiscal 2020, a 5% increase year over year.
ServiceNow (NOW)
ServiceNow provides cloud-based IT management software for businesses. Its solutions enable companies to manage their entire IT infrastructure, including applications, infrastructure, and security. ServiceNow has a market cap of $18.4 billion and a P/E ratio of 27.05. One of the biggest trends likely to impact businesses over the next few years is the rollout of 5G networks. ServiceNow is already working with telecom companies to provide services to their customers — especially those transitioning their networks to 5G. The company is also developing new products to help companies prepare for the increased cybersecurity threats that come with increased reliance on the internet.
Conclusion
The tech industry is one of the most exciting and fast-paced in the world. Innovations and software emerge every day, but not all tech companies are created equal. Some are worth billions of dollars, while others may be worth just a few thousand. That’s why investing in the right technology stocks is important to keep your portfolio strong and growing. Even though some software companies will have better long-term growth potential than others, that doesn’t mean you can’t invest in them – especially if you believe they’ll see an increase in popularity soon or investing heavily in AI and other technologies that will become more prevalent in the next five years.