4 Software Stocks to Consider Amid High Macro Uncertainty

Morgan Stanley analyst Keith Weiss listed 4 Software-as-a-Service (SaaS) stocks that screen best in the environment of rising interest rates and high macro uncertainty.

Investors are increasingly more focused on margins, says Weiss, as the high-growth sector of the stock market continues to suffer in the rising rates environment.

Based on the margins, valuable recurring bases, and generally positive fundamentals, Weiss sees Salesforce (NYSE:), Instructure (NYSE:), Workday (NASDAQ:), and Zoom Video Communications (NASDAQ:) as “best positioned” as each of the four stocks ranked in a top 10 positions based on these criteria.

“The analysis reinforces our conviction in companies like INST, ZM, CRM, and WDAY where ~65, ~52%, ~44%, and ~40%, of their total enterprise value, respectively, can be explained by their installed base, meaningfully underpricing the growth potential of each company moving forward,” Weiss said in a client note.

By Senad Karaahmetovic