- Bank of America Global Research analyst Kash Rangan recently published research featuring the top 10 software picks for 2020
Bank of America Global Research analyst Kash Rangan recently published a research note featuring the top 10 software picks for 2020.
These companies have moderate trade risk and “solid growth potential.” Plus these companies also “own their franchises” and dominate the markets they are focused on.
Here is the list of companies Bank of America listed as software stocks to watch in 2020:
1. Microsoft Corporation (MSFT)
Microsoft’s stock gained over 50% this year. Now the company has a market capitalization of $1.2 trillion. And Rangan increased his target for Microsoft to $200 from $162.
Microsoft’s growth in the cloud computing market could also drive major growth for the company in 2020. And Microsoft’s key growth drivers also include gaming and LinkedIn as well.
2. Adobe Inc (ADBE)
Rangan noted that Adobe’s fundamentals are looking strong. And he believes that the company could see 20% revenue growth next year.
3. Salesforce.com, Inc. (CRM)
Salesforce saw a stock price gain of over 20% in 2019. And Rangan noted that Salesforce will continue to push for sales capacity growth, R&D, and strategic acquisitions in order to position the company in a better place for “the next economic cycle upswing.”
4. Workday Inc (WDAY)
Popular human resources software company Workday saw its stock price grow over 3.5% this year. However, the company is building out a financial software arm to grow beyond its core focus.
5. Twilio Inc (TWLO)
Twilio’s stock price is went up 14.9% this year. However, the growth of the stock was largely slowed down this year due to new robocall regulations. But Rangan believes that Twilio could see sales grow by 40% in 2020.
6. Splunk Inc (SPLK)
Splunk’s stock has grown by about 44% for the year. And Rangan believes the company will continue to benefit from digital transformation spend. Another key reason for the growth is the transition to cloud-based subscriptions from licensing. So Rangan raised the price target to $200 from $170.
7. RingCentral Inc (RNG)
RingCentral’s stock has more than doubled in 2019 largely due to the company’s partnership with Avaya. A continued favorable shift in RingCentral’s business mix will improve the growth for the company.
8. Coupa Software Inc (COUP)
Coupa Software’s stock jumped 140% this year. And Rangan is expecting there to be more gains in 2020. Coupa is well-positioned to continue hitting revenue growth of more than 35%.
9. HubSpot Inc. (HUBS)
Inbound marketing and sales HubSpot company saw stock growth of 26% this year. And the company is poised with compelling advantages that would drive solid share gains in 2020.
10. Avalara Inc (AVLR)
Automated tax compliance company saw its stock jump 134% in 2019. Rangan believes that the company will continue to gain market share in the segment in 2020. In Q3, Avalara added over 800 new customers, which helped the company beat analyst expectations. That was the seventh consecutive quarter that core customers jumped.
