GET IN EARLY! 3 Stocks Poised to Benefit From the $2 Trillion Software Selloff

If you watched the market over the past couple weeks, you saw tech get hammered again. Chip stocks sank. The semiconductor index slipped into bare market territory and an old fear came roaring back. That being AI is going to make much of the software industry obsolete. Wall Street didn't wait around to find out. Investors dumped software stocks first and ask questions later. They even gave it a name, the SAS apocalypse. As most of you know, SAS means software as a service. And over the past year, software companies have lost about $2 trillion in value. Even giants like Microsoft, Oracle, and Salesforce got caught up in this sell-off. But here's what really caught my eye. A handful of names quietly refused to go down with a ship. I could see signs there was something unique about them. And that's why I've been loading back up into the software space in these select names. So today, I'll show you three software stocks that make the grade and then answer the key question. Was the whole panic one giant overreaction? Now, if this sounds like a topic you want to hear more about, then hit that like button. It tells the YouTube to put more videos like this into your feed. Let's start with a company that does something almost aggressively boring. We're talking about phone systems. We're talking about the company UMO, the symbol of OOM A. They sell cloud-based phone systems to small medium-sized businesses. The folks that finally are ditching those ancient desk phones for the cloud. Boring on the surface, but not so much when you look at the underlying numbers. And perhaps more telling, the stock is up roughly 20% in the past 30 days, while most other software names have struggled. Before I go on, I should probably tell you who I am. I'm Steve Wrightmeister, but all my friends call me Righty. I've been investing for over 40 years, and today I'm a partner at Wall Streetzen.com, where a quant rating system analyzes a wide array of data points to identify stocks with the highest likelihood of outperforming the market. Now, another quick note, this is all for educational purposes, uh, not personalized investing advice. So, always do your own homework before buying or selling any stocks. Now, back to UMA. Once a business signs up, that revenue is recurring and switching costs are high, so customers stick around for years. This helps explain why UMA has strung together a long run of earnings beats without a single miss. But what's even more exciting is what's coming ahead. UMA's earnings are forecast to grow by over 66% a year, while the rest of the telecom industry is forecast to grow at a meager 9% pace. Now, on to our data. I'm talking about the Zen Ratings quant model that scores every stock across 115 factors and then boils it down to an intuitive letter grade of A throughF. UMA indeed earns an overall rating A, amounting to a strong buy recommendation. Even more impressive, it ranks in the top 1% of the greater than 4600 stocks we track owing to a truly stellar fundamental profile. Underneath the overall ratings are seven component grades that help identify a stock specific areas of strength and weakness. Now, UMA continued to impress in these areas such as the top 19% showing for financial strength. Then we have top 9% of all stocks for sentiment, which tells you the smart money is leaning into these shares. But the true standout here is the top 1% showing for growth, which the best possible way to foreshadow more earnings beats ahead. You might notice the modest C-grade for value, but C is the biggest bucket of stocks where 60% of the stocks reside. As we pull back the curtain, the reality is that UMA is in the top 23% of stocks for value. So, not too shabby on that front after all. So, here we have a software company that used AI to improve its offering, leading to very sticky recurring revenue. This shows up in spades in the Zen Ring's 115 factor review, especially the top 1% shown for growth. This is precisely why UMA has earned a spot in my Zen investor stock picking portfolio. This is where I feature my top 20 stocks for the long haul. Spoiler alert, the next two stocks in the video today are also in the Zen Investor portfolio. But first, a quick heads up. If you like discovering under the radar stocks like this, then the best thing you can do is a sign up for my next live training session this coming Monday. The focus is on timely market insights plus my top picks. It's totally free, but you do need to sign up. Do that now to join me this coming Monday at 7 p.m. Eastern time. Just go to wall streetzen.com/live. Let's roll on to our second impressive software stock in Tibula with a symbol of TBLA. Now, this company also got caught up in the crosshairs of the AI is going to kill software hysteria that did originally hold down shares for quite a while, but is now up about 20% in the past month. Now, here's the background story. Tabula runs a digital advertising and content discovery platform, reaching over 600 million people uh every day. And no doubt you've used it many times in the past and didn't even know it. When the fear hit, names like this got crushed under the idea AI was going to make them obsolete. But Tabula flipped that on its head. Their new AI powered ad engine called Realize is actually driving advertiser growth and keeping customers longer. AI isn't killing Tiboula is simply making Tiboula more money. In fact, Tibula's earnings are forecast to grow over 25% a year, much, much faster than the industry average. And yet the stock trades at a PEG ratio of just 0.55. This indicates it's a screaming bargain when the average stock trades for a PEG nearly three times higher. Before I get to the analyst recommendations, a quick ask. If you're getting value from this video, then please hit subscribe and turn on the notification bell. That's because I publish datadriven stock analysis like this every week, and it's the best way to ensure you don't miss any of it. Back to tabula. Uh there are some Wall Street analysts taking notice. explains why they enjoy three strong buy and one buy recommendation, meaning no holds and no sell recommendations out there. Buy recommendations are kind of a dime a dozen. So what's much more important is who is standing behind that recommendation. In this case, we have an analyst in the top 7% of his peers based upon the stock picking performance who is downright pounding the table on Tiboula. I'm talking about Barton Crockett of Rosenblad. He has the kind of impressive track record that makes people stop and listen. As we turn to the Zenerating Quant, Tibula also earns an elite agrade which is given to all stocks in the top 5% of uh the 4600 analyzed. In this case, Tiboula is actually in the top 1% which greatly increases the odds of future share price outperformance. As we uh get down into the component grades, you'll see balance strength in several key areas. Financials in the top 21% of all stocks tracked sentiment the smart money indicator in the top 19% growth uh top 16% and top 6% of all stocks for value. This favorable mix suggests we have a healthy growing company that other investors are sleeping on leading to seriously attracted value. A pretty good reason why it's in my Zen investor newsletter portfolio. Before we get to that last stock, one quick thing. If you want to stay one step ahead of the market, then join me live every Monday at 7 p.m. Eastern. as when I share my updated market outlook and trading plan to outperform. This is also when I unveil my trade of the week based upon our proven zen ratings comp model and my greater than 40 years of investing experience. It's a free event, but you do need to register. Just go to wall streetzen.com/live or click the uh link in the description below or scan the QR code on your screen. Just pause the video for a moment to sign up. Don't worry, I'll wait for you and then I look forward to seeing you on Monday. All right, I saved the best for last. That's because I recently gave this stock the high honor of being my stock of the week. And as a side note, the other stocks I've talked about today were other recent picks. This company recently did something with its own cash I almost never see from a company this size. Imagine a company spending more than half of its entire market value to buy back its own stock. If that doesn't sound like tremendous management conviction on future growth prospects, then I don't know what does. But let me back it up a little bit to tell you who they are and what they do. The company is called Riskified with a symbol RSKD. And they use AI to guarantee online e-commerce transactions. For example, when you order online, their systems have a split second to decide, is this a real customer or is this fraud? Now, if they get it wrong, then riskified eats the cost. That's a powerful promise to online retailers and explains why more and more are signing up for the unique services. Now, back to that enormous share buyback back program. This is a company with a market cap around 750 million and yet management has committed 450 million to buying back its own shares. This is a mindblowing percentage of shares and says that management feels incredibly confident about future growth and what that means for the share price. Now, [snorts] this doesn't seem like much of a stretch when you consider they have been landing bigger and bigger customers. And this is showing up in their results as proven by their current hot streak of four straight earning speeds. And our data backs it up too. Riskifier earns an overall A, which again equals a strong by recommendation. All in all, it ranks in the top 2% of all stocks for its strong fundamental profile in our Zen ratings model. Now, look at the component grade. Two grades uh really jump off the page here. First is growth, which ranks the top 4% of all stocks tracked. Note, this is a measure of the consistency of growth that often pretends well for more earnings ahead. Likely management agrees with this wi-i which is why they have such a massive buyback program underway. Riskified also scores in the top 4% of all stocks for our AI factor. Now, quick word on that front. It's not about how much AI the company is using. It's our system using AI to spot price patterns that have historically pointed to future share price gains. So top 4% of this AI timeliness factor points to shares that are likely to outperform the market in the weeks and months ahead. Now growth plus timeliness plus massive share price buyback is a good setup for any stock, but especially when leveraging AI for a massive opportunity in online fraud protection. This has me believing these shares could double or more in the year ahead. Another reason it was a welcome addition to my Zen Investor newsletter portfolio. So, there you have it. Three A-rated software companies that are sidest stepping the share price problems of their peers and ready for even more upside. Hopefully, you can see some of them deserving a spot in your portfolio. Now, quick reminder, the Zen ratings are updated daily, so you can pull a free rating on over 4,600 stocks yourself at wall streetzen.com. Now, I want to hear from you. Which of these three stocks do you like the most? And are there any other software names I didn't mention you think are ready to bounce higher? Drop your thoughts in the comment section below for the benefit of our community. And you want to know which stocks I'm keeping my eye on for the next uh tripledigit AI boom? Then I broke that down in the video that's popping up on your screen right now.