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Investors’ interest in the software stocks is evidenced by the SPDR S&P Software & Services ETF’s (XSW) 11.6% gains over the past three months versus the SPDR S&P 500 Trust ETF’s (SPY) 7.1% returns. Continuing digital transformation and product innovation should help the software industry grow in the coming months. Indeed, according to Statista, IT spending on enterprise software will likely amount to roughly $599 billion this year, representing a 13.2% year-over-year rise.
So, we think it could be wise to bet on fundamentally strong software stocks Software Aktiengesellschaft (STWRY) and CSG Systems International, Inc. (NASDAQ:CSGS). They look undervalued at their current price levels, and they have overall Strong Buy ratings in our proprietary POWR Ratings system along with B grades for Value.
