7 Software Stock Predictions for 2023


  • Corporations seek greater efficiency as they migrate technology solutions to the cloud.
  • Autodesk (ADSK): Digitizing workflow will accelerate in the years ahead.
  • CrowdStrike Holdings (CRWD): Cybersecurity threats will not go away, which increases demand for CrowdStrike products.
  • Datadog (DDOG): Customers need to move their workloads to the cloud and digital applications.
  • ServiceNow (NOW) – Low-code increases the ease of creating efficient applications.
  • Okta (OKTA): Identity management demand will rise in the year ahead.
  • Oracle (ORCL): Multi-cloud support increases Oracle’s revenue potential next year.
  • Zscaler (ZS): Digital transformation projects are multi-year in length and will continue into 2023.
Software Stock Predictions - 7 Software Stock Predictions for 2023

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Technology investors will have plenty of software stock predictions before this year is up. Between hardware and software, the bear market took both sub-sectors lower. However, software companies are more attractive because they have lower variable costs. From a macro viewpoint today, the economy is in a recession. By the end of the year, the slowdown will worsen. By 2023, companies will reset their budgets for the new year. They will cut costs on things that do not increase efficiency. Conversely, software firms will offer products that increase company productivity and drive sales.

Here are some of the top technology stocks to consider.

ADSK Autodesk $197.85
CRWD CrowdStrike $153.39
DDOG Datadog $79.07
NOW ServiceNow $355.16
OKTA Okta $54.92
ORCL Oracle $66.28
ZS Zscaler $147.72

Autodesk (ADSK)

An Autodesk (ADSK) sign on an office in Toronto, Canada.
Source: JHVEPhoto / Shutterstock.com

Autodesk (NASDAQ:ADSK) announced a strategic collaboration with Epic Games on Sep. 27. The two companies will develop immersive real-time environments. End users in the ICE sector may deliver more innovative projects in less time.

Autodesk’s Head of Construction Strategy, Sidharth Haksar, said that after the pandemic, business is normal again. In addition, the company spoke with customers to confirm that backlogs remained robust. Moving forward, Autodesk anticipates that the construction industry will embrace the digitized industry. The construction market has many workflows. Expect the company to promote the connected workflow in 2023. Inflation increases the cost of resource waste in a project. Its customers will accelerate its implementation of Autodesk’s software to sustain its operating margins.

In the second quarter, Autodesk posted revenue growing by 17.0% Y/Y to $1.24 billion. Total bookings rose by 17% to $1.19 billion.

CrowdStrike (CRWD)

Mobile phone with website of American software company CrowdStrike Holdings (CRWD) Inc. on screen in front of website. Focus on top-center of phone display. Unmodified photo.
Source: T. Schneider / Shutterstock.com

CrowdStrike (NASDAQ:CRWD) will flourish in the next year as demand for cybersecurity increases. Last month, the firm announced it would acquire Reposify Ltd., which provides an external attack surface management platform. It protects organizations by scanning the Internet for exposed assets. As a result, it should help eliminate risk from vulnerable assets before attackers take advantage of the weakness. Also, in 2020, CrowdStrike acquired Preempt Security, which helps protect customers from attacks that leverage compromised identities and lateral movements.

In the last quarter, Crowdstrike added 1,741 in net new customers (or net new logo counts). Since it has a strong Trusted Managed Security Service Providers business, expect accelerated revenue growth. Crowdstrike has the opportunity to add new customers and add new businesses. Investors should accumulate CRWD stock through 2023.

Datadog (DDOG)

an image of a cloud imprinted on a circuit board lit up by blue circuit lights. AVCT stock
Source: Blackboard / Shutterstock

Datadog (NASDAQ:DDOG) offers an observability service for cloud-scale applications. With more corporations relying on Software-as-a-Service (SaaS), they require the company’s server monitoring solutions.

Company CFO David Obstler says that five years from now, Datadog will benefit as customers transition their workloads to the cloud and digital applications. Currently, they are in the early phases of this transition. The company wants to centralize its platform for professionals who are in DevOps. DevOps is a set of practices that combines software development with IT operations. Clients will recognize the value-add from Datadog over time. The software firm will add functionality to the platform, increasing the value of working in its platform. Furthermore, technical clients will communicate and collaborate within Datadog’s DevOps.

ServiceNow (NOW)

ServiceNow office building in Silicon Valley;
Source: Sundry Photography / Shutterstock.com

ServiceNow (NYSE:NOW) develops a cloud computing platform. Customers manage their workflow-based technology to build applications. President and CEO Bill McDermott said the company will have 750 million net new applications built on low-code platforms in the next two years.

The low-code revolution differs vastly from complicated software platforms in the past. ServiceNow offers business agility by helping customers navigate to update applications. With inflationary pressures, customers will seek cloud platforms that help their companies save money.

ServiceNow has a German auto manufacturer that deals with 30 million parts. Its operations involve 4,000 suppliers. It facilitates the management of the supply chain in real time on a low-code platform.

Investors may take advantage of the drop in NOW shares. In the second quarter of 2022, the company posted total revenue of $1.75 billion, up by 24% from last year. Subscriptions grew by 25% Y/Y. The stock traded lower after the report because investors expected a stronger full-year subscription revenue outlook.

Okta (OKTA)

Cybersecurity Stocks To Buy: Okta (OKTA)
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Okta (NASDAQ:OKTA) is in a downtrend because investors are concerned about its weak outlook. In the second quarter, the provider of identity and access management posted a Q2/2023 revenue of $452 million. Subscription revenue was $435 million of the $452 million posted in the period.

Identity management continues to pivot away from on-premise to on the cloud. For example, workers previously connected to a Microsoft Windows network on Microsoft Active Directory. Today, companies want Okta’s privileged system. This protects their database and data center accounts. Okta offers a central system that manages three things: access management, privilege access, and identity governance.

More companies will move their services online. They need easier ways to manage staff access. With Okta, technology staff may automate the creation, change, and revocation of user accounts. In 2023, identity management might get closer to a “passwordless” world. To get there, customers will consider implementing Okta’s solution first.

Oracle (ORCL)

The Oracle (ORCL) sign hangs on an Oracle office in Deerfield, Illinois.
Source: Jonathan Weiss / Shutterstock.com

Oracle (NYSE:ORCL) recently acquired Cerner Corp., a supplier of health information technology services. In the last quarter, Cerner contributed to Oracle’s cloud revenue of $3.6 billion. In the current second quarter, Oracle expects total revenue to grow by 21%. Its cloud is the biggest contributor to growth. Oracle expects the cloud unit to grow by 46% from last year.

The multi-cloud era already started. Customers are buying applications and cloud infrastructure from multiple vendors including Oracle. The firm embraces multi-cloud interoperability. This mindsight is fueling Oracle’s total cloud business strength.

Oracle is the only infrastructure company that builds enterprise-scale applications. As a result, it offers secure applications at the infrastructure layer. Customers require more secure systems that are easy to run. This improves their productivity while Oracle protects their data.

The company’s database works in multiple clouds. For example, it works on AWS, HeatWave, and MySQL. The flexibility increases Oracle’s competitiveness as it strengthens its growth rate in 2023.

Zscaler (ZS)

an image of a cloud imprinted on a circuit board lit up by blue circuit lights
Source: Shutterstock

Zscaler (NASDAQ:ZS) spooked investors on Oct. 11, when its president, Dr. Amit Sinha resigned to join a privately-held tech firm as CEO.

The company’s architecture suits the security problems corporations encountered in 2022. It protects its customers from security threats at the data and application levels. In addition, it appeals to clients who want more than just firewall and virtual private network security.

Zscaler is designing security solutions around the cloud and mobility. The solution is like a switchboard that connects every critical application to other ones. Expect the company to increase its marketing efforts to improve awareness of its product. Once it convinces CIOs and chief technology officers about its infrastructure, it will win more deals in 2023.

If the economy enters a recession, corporations will not cut transformation projects. These are multi-year efforts that are a high priority. Zscaler address not only security but high availability for online applications.

On the date of publication, Chris Lau did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Chris Lau is a contributing author for InvestorPlace.com and numerous other financial sites. Chris has over 20 years of investing experience in the stock market and runs the Do-It-Yourself Value Investing Marketplace on Seeking Alpha. He shares his stock picks so readers get actionable insight to achieve strong investment returns.

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