3 Standout Software Stocks to Scoop Up Now There are plenty of trends that should help to drive growth for the most innovative software providers for many years to come. That's why we've put together a list of...

Focus on Quality With These 3 Standouts in the Software Space

The software industry is arguably one of the most high-growth areas of the tech sector, which is likely why so many investors are interested in finding the next big winner there. Getting into the right name at the right time can mean potentially life-changing profits, although these stocks are also notorious for their volatility. That's why it's important to be highly selective when it comes to choosing software stocks to invest in, as oftentimes a seemingly strong company can fizzle out over the long run thanks to the competitiveness of the industry.
Many of these stocks trade at nosebleed valuations and get heavily punished for not meeting expectations with their earnings, adding to the importance of only buying the best. With that said, there are plenty of trends that should help to drive growth for the most innovative software providers for many years to come. That's why we've put together a list of some of the best software stocks to scoop up now.
Let's take a deeper look below.

DigitalOcean Holdings (NYSE: DOCN)

The cloud software space is certainly producing plenty of intriguing new companies, yet DigitalOcean Holdings has a few unique qualities that set it apart. The company offers infrastructure and platform tools for developers, start-ups, and small and medium-sized businesses, which is huge since many of the larger cloud providers are simply too expensive and complex for those types of customers. DigitalOcean clients benefit from more transparent pricing and easier to use solutions, which has helped the company grow and retain a solid customer base.
The DigitalOcean platform is used across plenty of different industry verticals, like web and mobile applications, website hosting, e-commerce, media and gaming, personal web projects, and more, which tells us just how diverse the company's software is. The company just reported Q3 earnings including revenue growth of 37% year-over-year to $111.4 million and a net dollar retention rate increase of 116%. This tells investors that DigitalOcean is not only growing its customer base but also holding on to its existing ones. It's a top pick in the software space at this time and a great buy-the-dip candidate to consider going forward.

The Trade Desk (NASDAQ: TTD)

Advertising has undergone some truly monumental changes over the last few years, and it's quite clear that digital campaigns are the way forward. That's a big reason why The Trade Desk is a software stock to consider adding, as the company has developed a self-service, cloud-based platform that allows ad buyers to create, manage, and optimize data-driven digital advertising campaigns across tons of different channels. Advertisers want each dollar spent on their campaigns to add as much value as possible, and with The Trade Desk's data-driven strategies, it's much easier for them to figure out what works best.
The company recently launched a new platform called Solimar that should help to attract new clients going forward, as it provides a new user interface, better ad tools, and updates to the AI engine. The Trade Desk also just delivered a Q3 earnings beat on record revenue of $301.1 million, up 39% year-over-year, which is driving the share price to new all-time highs. Keep an eye on the stock as it approaches the all-important $100 per share mark, as this could be a huge winner in the coming quarter and beyond.

Shopify (NYSE: SHOP)

Sometimes, the top software stocks can cost investors a pretty penny to add to their portfolios. However, when the company has created a revolutionary platform that is changing the way businesses operate all over the world, it's often worth the price of admission. That's the case with Shopify, a leading global commerce company that has developed a cloud-based platform with tools to help to start, grow, market, and manage a retail business. If you are bullish on the prospects of e-commerce, this company might just be the best way to play the further expansion of that industry, as Shopify's robust platform simplifies selling products and services online for entrepreneurs all over the world.
The company just reached a big milestone as its cumulative gross merchandise volume reached $400 billion in Q3, which is astounding when you consider that the company had $200 billion in cumulative GMV just 16 months ago. While Shopify didn't quite produce the growth that the street expected for Q3, the fact that the company still delivered $1.1 billion of revenue, up 46% year-over-year, and GMV of $41.8 billion, up 35% year-over-year, is still very impressive. With the upcoming holiday season set to benefit the company's earnings in the near term and secular trends also working in the company's favor, this is certainly a software stock worth scooping up at this time.