Continuing remote and hybrid working due partly to the emergence of the COVID-19 omicron variant and to the need for improved productivity have accelerated the adoption of software solutions. In addition, rapid digitalization is expected to accelerate the software industry’s growth. Therefore, we believe recent price dips offer an excellent opportunity to bet on fundamentally sound mid-cap software technology stocks Endava (NYSE:DAVA), Amdocs (NASDAQ:DOX), and Datto (MSP). Read on.Due to the emergence of the COVID-19 omicron variant, some states are imposing or re-imposing travel restrictions, leading to delays in some U.S. workers return to offices. The continuing remote lifestyle should reinforce small to large enterprises’ reliance on software solutions. In addition, according to a Gartner (NYSE:IT) report, the U.S. will lead in terms of remote workers in 2022, accounting for 53% of the U.S. workforce.
A better work-life balance and productivity, higher average annual income, and higher job retention have driven workers and organizations to opt for remote/hybrid work and lifestyles. Businesses are spending billions of dollars on software to upgrade and improve their business processes. As such, the global software market is expected to reach $823.71 billion by 2026, registering a 7.2% CAGR.
These factors have heightened investor optimism about the software industry, which is evident in the iShares Expanded Tech-Software Sector ETF’s (IGV) 19.5% returns over the past year. So, we think it could be wise to bet on quality mid-cap software stocks Endava plc (DAVA), Amdocs Limited (DOX), and Datto Holding Corp. (MSP). They are currently trading below their 52-week highs and could witness significant upside in the coming months.