Will the software industry still be the darling of 2024? Its comeback in 2023, thanks to the market embracing AI, pushed the sector to greater heights. These days, it seems pretty much all tech companies are looking for ways to monetize AI in various industries, but there may still be a long way to go. However, the thing to remember is that software stocks remain one of the industry sectors that, historically, offer the best growth. Indeed, these companies tend to report substantial revenue that you won’t easily find in other sectors. If you want to dip your toes into tech, these three software stocks are some of the most attractive right now.Â
GitLab (GTLB)
GitLab (NASDAQ:GTLB) offers a DevSecOps (development, security, and operations) platform, allowing developers to operate in a single codebase with a unified data model and interface. That permits organizations to deploy the platform as a software service offering hosting in a private or public cloud. In addition, the DevSecOps platform lets customers transfer their DevOps workflow across any hybrid or multi-cloud environment. Teams from all sizes across all industries can use the product.
GitLab’s latest financial quarter showed revenue growth of 32% year-over-year (YoY). The company also announced a non-GAAP operating income of $4.7 million, a remarkable turnaround to profitability compared to its previous year. CEO Sid Sijbrandij emphasized its unique DevSecOps Platform helps enhance developer productivity and reduce software spending. That helped increase the number of customers that spend more than $100,000 yearly by about 37%.
GTLB’s commitment to innovation has been recognized in the segment. It recently received the Google Cloud Technology Partner of the Year Award for DevOps and Application Development for 2023, adding to the company’s credibility. Its strong momentum and increasing customer base show why it is one of our top software companies to buy.
Procore Technologies (PCOR)
Procore Technologies (NYSE:PCOR) is a software provider providing a cloud-based platform that facilitates communication between industry participants and other industry members on any linked device, including engineers, architects, owners and specialty contractors. With its software, participants carry out construction management on an updated platform, enabling instant access to vital project data, promoting stakeholder engagement and helping streamline intricate workflows.
Recent company innovations include advancements in Procore Connectability, Procore Copilot and Procore Pay. Moreover, the company announced an AI-powered feature, Procore Copiliot, that aims to help automate time-intensive manual processes across its platform.
Procore Technologies’ latest financials reported a 33% revenue increase YoY. Even with the company facing demand challenges, its focus on global connectivity in the construction industry helped add 363 new organic customers and achieved a 95% gross revenue retention rate.
PCOR’s full-year outlook expects revenues to increase 30% YoY. With an expanding customer base and solid financial momentum, PCOR has the qualities of one of the best software companies to buy.Â
Monday.com (MNDY)
Monday.com (NASDAQ:MNDY) is an Israel-based software company known for its open platform, monday.com. The website helps customers create software applications and build work management tools that fit any need. Its intuitive features connect processes and systems efficiently, providing a seamless experience. Monday.com recently announced its platform helped provide its customers with a stellar 100% YoY service revenue growth. In addition, the company was awarded the 2023 Gartner® Magic Quadrant™ Leader for Collaborative Work Management, highlighting its value proposition to its customers.
Additionally, MNDY’s recent innovations, like MondayDB, offer customers improved dashboards and enhanced data manipulation capabilities. That highlights the company’s strong commitment to improving client experience. Positive momentum and constant push for innovation put MNDY on our software companies’ buy list.
In terms of its financials, MNDY’s third-quarter report showcased excellent growth. Revenue increased by 38% YoY. MNDY also steered its latest non-GAAP operating income to positive territory. Importantly, high-value customers (those who spend more than $50k annually) were up a whopping 57%.
On the date of publication, Rick Orford did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
