3 Major Software Stocks to Buy in 2022 For Investment

If there is one sector that has managed to record massive growth throughout the course of the past few decades then it is the software sector. There are certain reasons why it is possible to generate massive growth in this sector. The task of distribution is easier and it manages to get long-term customers through subscriptions. Hence, these stocks are expected to be popular in 2022 as well, and here is a look at three software stocks that you could consider for 2022.

1 Palantir  (NYSE:PLTR)

The first software stock that you could add to your watch list in 2022 is that of Palantir. The company is involved in data mining and analytics services and generally provides its services to the government as well as to large private corporations.

The company has been growing at a significant rate and after having registered revenue growth of 25% in 2019 and 47% in 2020, it expects to grow at 40% in the 2021 fiscal year. The company may not be profitable yet but it could turn out to be a growth machine in the years to come and that is the reason why investors could add it to their watch lists.

2 Zendesk (NYSE:ZEN)

Another software stock that could be on the radars of many investors this year is the Zendesk stock. The company is best known for providing customer relationship management or CRM tools that are backed by the cloud. The company has decided to target smaller companies instead of the big-ticket ones like its peer Salesforce and that seems to have paid off so far.

In 2020, the company managed to generate growth of 26%, and this year, Zendesk has projected that its growth is going to be in the 29% to 30% range. Although it is true that the company is not profitable yet, it should not be forgotten that its gross margins are improving steadily and could make for a strong long-term play.

3 Datadog (NASDAQ:DDOG)

Last but not the least, it is the innovative software company Datadog, which has become renowned for providing information technology professions with the tools to monitor various aspects of their work. It offers a dashboard by way of which one can check the performance of multiple servers, cloud services, databases and mobile apps.

In 2019 and 2010, the company’s revenues grew by 835 and 66% respectively. This year, the company has projected its growth to be 65%. It is not yet profitable and gross margins are not that great either, however, if it can control its cloud spending things could improve.