Invest in 5 Internet Software Stocks for Sparkling Returns – 24/7 Wall St.

The technology sector is seeing a dream run in 2023 after a highly disappointing 2022. Year to date, out of the 11 broad sectors of the S&P 500 Index, the Technology Select SPDR (XLK) is the largest gainer, jumping 43.6%. Its close resemblance — the Communication Services Select Sector SPDR (XLC) — has also surged 43.3%. Moreover, the tech-heavy Nasdaq Composite has rallied 36.5% year to date.

Within the technology sector, the Zacks Defined Internet-Software Industry is currently placed in the top 25% of all industries with a year-to-date return of 61.5%. The Internet software industry is benefiting from continued demand for a global digital transformation. Growth prospects are alluring primarily due to the rapid adoption of Software as a Service (SaaS), which offers flexible and cost-effective delivery of applications.

SaaS attempts to deliver applications to any user, anywhere, anytime and on any device. It has been effective in addressing customer expectations of seamless communications across multiple channels, including voice, chat, email, web, social media and mobile.

The growing need to secure cloud platforms amid rampant incidences of cyber-attacks and hacking is driving the demand for web-based cyber security software. As enterprises continue to move their on-premise workload to cloud environments, application and infrastructure monitoring is gaining importance. This is increasing demand for web-based performance management monitoring tools.

Moreover, the pay-as-you-go model helps Internet software providers scale their offerings per the needs of different users. The subscription-based business model ensures recurring revenues for the industry participants.

At this stage, it will be prudent to invest in Internet software stocks with a favorable Zacks Rank to strengthen one’s portfolio.

Our Top Picks

We have narrowed our search to five Internet software stocks with strong potential for the rest of 2023. These stocks have seen positive earnings estimate revisions in the last 30 days. Each of our picks carries a Zacks Rank #1 (Strong Buy).

CrowdStrike Holdings Inc. CRWD is benefiting from the rising demand for cyber-security solutions owing to the slew of data…