Benefit From the Power of AI With Our High-Quality Picks
Invest with confidence knowing that StockStory’s team of analysts combine their expertise with our proprietary AI-driven algorithms to find edges in the market.
StockStory
+175.5%Total 5Y Return
S&P 500
+93.6%Total 5Y Return
Sep 2019
Sep 2024
Software as a Service
Software is eating the world and there is virtually no industry left that has been untouched by it. In the past, businesses bought and relied on packaged software, which had high-upfront cost, required hardware and software maintenance and was often unaffordable for small businesses. Software delivered as a Service (SaaS) is typically hosted in the cloud so customers don’t have to worry about computational resources, is easy to set up, and with no or little upfront costs, it is affordable to anybody. Whether it is cybersecurity, marketing, data and analytics or tools for software developers, SaaS is the future of software.
Datadog
Named after a database the founders had to painstakingly look after at their previous company, Datadog (NASDAQ:DDOG) is a software-as-a-service platform that makes it easier to monitor cloud infrastructure and applications.
Why We Like It:
Companies like Datadog are special. Its 46.3% annual revenue growth puts it in a league of its own and its efficient sales engine generates mountains of cash. This is one of the highest-quality software stocks in our coverage.
Dynatrace
Founded in Austria in 2005, Dynatrace (NYSE:DT) provides companies with software that allows them to monitor the performance of their full technology stack, from software applications to the infrastructure they run on.
Why We Like It:
Dynatrace's robust free cash flow enables it to invest in many ventures. On top of that, its customer engagement increases every year. Keep an eye on this one.
JFrog
Named after the founders' affinity for frogs, JFrog (NASDAQ:FROG) provides a software-as-a-service platform that makes developing and releasing software easier and faster, especially for large teams.
Why We Like It:
JFrog is growing at a mouth-watering pace while staying massively cash generative. On top of that, its impressive retention and upgrade rates demonstrate customer loyalty. This is one of our top software stocks.
CrowdStrike
Founded by George Kurtz, the former CTO of the antivirus company McAfee, CrowdStrike (NASDAQ:CRWD) provides cybersecurity software that protects companies from breaches and helps them detect and respond to cyber attacks.
Why We Like It:
CrowdStrike's efficient sales engine, remarkable revenue growth, and bountiful free cash flow generation position it as a winner in the competitive software-as-a-service market. Any surprise this is one of our favorite stocks?
Zscaler
After successfully selling all four of his previous cybersecurity companies, Jay Chaudhry's fifth venture, Zscaler (NASDAQ:ZS) offers software-as-a-service that helps companies securely connect to applications and networks in the cloud.
Why We Like It:
Zscaler is exceptional. Its 50% annual revenue growth sets it apart and its efficient sales engine produces significant cash that can be reinvested into new products. This is a prime example of a "high-quality" business.
SentinelOne
With roots in the Israeli cyber intelligence community, SentinelOne (NYSE:S) provides software to help organizations efficiently detect, prevent, and investigate cyber attacks.
Why We Like It:
SentinelOne has more than tripled its revenue over the last three years. That's no typo. On top of that, its customers love its products and increase their spending every year. This is a great company to add to your watchlist.