The rising demand for software services to support fully remote and hybrid work structures, and the ongoing digital transformation, make the prospects bright for software stocks Microsoft (MSFT), Adobe (NASDAQ:ADBE), and Garmin (GRMN). We believe these companies’ stable fundamentals and market dominance should help their shares continue to gain irrespective of the market conditions. Read on for details.Since last year, the software industry has witnessed unprecedented growth driven by surging demand for state-of-the-art software and cloud computing services amid COVID-19-compelled remote lifestyles. Investor optimism in this space is evidenced by the SPDR S&P Software & Services ETF’s (XSW) 46.3% gains over the past year versus the broader S&P 500 Trust ETF’s (SPY) 32.9% returns.
Amid rising concerns regarding the COVID-19 Delta variant’s spread in several countries, the remote working culture is expected to remain the norm at least over the next several months. Furthermore, the rapid digital transformation of virtually every industry is likely to drive the demand for software services higher in the coming months and beyond.
While rising concerns regarding decelerating economic growth caused the tech-heavy Nasdaq composite to decline yesterday, established software stocks Microsoft Corporation (NASDAQ:MSFT), Adobe Inc. (ADBE), and Garmin Ltd . (NASDAQ:GRMN) witnessed modest gains. These fundamentally sound stocks, with immense growth potential, are currently trading near their all-time highs and are expected to continue advancing in the coming months.