The Investment Landscape

Many of the players in the Zacks Computer-Software Industry have contributed to the robust performance of the Nasdaq over the past year. The industry’s one-year return of +58% easily outshines the S&P 500’s +21% and even surpasses the Nasdaq’s +36%.

The Outlook for 2024

The prospects of easing inflation and lower interest rates bode well for consumer spending on non-essential items like tech products. Consequently, the outlook for several leading computer software stocks has become very intriguing again.

Blackbaud (BLKB)

Blackbaud holds a Zacks Rank #1 (Strong Buy) and offers a full spectrum of cloud-based and on-premise software solutions. The company has witnessed a significant improvement in stock performance, with steady top-line growth and expansive profitability propelling its stock up +35% over the last year.

Microsoft (MSFT)

Microsoft, with a Zacks Rank #2 (Buy), has seen a remarkable climb of +64% in the last year. The company’s growth has been fueled by enterprise-to-consumer software solutions, leading cloud capabilities through Microsoft Azure, and strategic acquisitions. Microsoft is expected to post double-digit percentage growth on its top and bottom lines in FY24 and FY25.

Trend Micro (TMICY)

Trend Micro, with an “A” Zacks Style Scores grade for Momentum and a Zacks Rank #1 (Strong Buy), is a Japan-based software solutions provider known for its endpoint and Web security software and services. The company’s stock has risen a very respectable +15% over the last year, with fiscal 2024 EPS estimates climbing 20% in the last 30 days from projections of $1.48 a share to $1.78 per share.