As the trading year begins, investors should watch software companies likely to benefit from increased transaction activity. Analysts expect a rise in mergers and acquisitions in the software sector through 2025, especially with a favorable regulatory environment under President-elect Trump. Analyst Alex Zukin highlights the resilience of software stocks and emphasizes potential revenue growth and consolidation opportunities. Key names on the watchlist include F5, which saw a 40.5% rise in 2024 and continues to outperform the market. However, most analysts recommend holding the stock due to limited upside. In contrast, Box has garnered positive ratings, with an expected 20% upside from its current price and strong growth projections. Additionally, Unity Software and Paycor HCM have gained significantly after substantial declines in 2024, with forecasts predicting various levels of revenue growth for the coming years. Notably, Paycor HCM’s stock surged over 23% after news of potential acquisition talks with Paychex, which could lead to an announcement soon. Overall, there seems to be a favorable outlook for certain software stocks as they adapt to evolving market conditions.
