It's no secret that tech stocks have been powering the market gains over the past few years, and software stocks were among the biggest drivers of this growth.
Multiple factors are propelling the software industry forward, such as the rapid advancement of AI technology, high demand for IT solutions, and the ongoing expansion of the global digital economy.
Wedbush tech expert Daniel Ives has been watching the tech industry, and his take on it points to continued strength supported by AI and cloud expansion.
"Solid enterprise spending, digital advertising rebound, and the AI Revolution will drive tech stocks higher into year-end in our view," Ives opined. "We believe 70% of global workloads will be on the cloud by the end of 2025, up from less than 50% today."
Keeping that in mind, Ives goes on to add that the time has come to hit buy on two software stocks. They may not be household names, but according to the TipRanks data, both stocks are Buy-rated - and Ives sees significantly more upside to each than the consensus on the Street. Let's take a closer look.
Couchbase (BASE)
We'll start with Couchbase, a modern database platform provider that offers users and developers everything they need to support a wide range of applications - from cloud, to edge, to AI. Couchbase bills itself as a one-stop-shop for data developers and architects, making its services available through its powerful database-as-a-service platform, Capella. Organizations using the service can quickly create applications and services that deliver premium customer experiences, giving top-end performance at affordable prices.
The Capella platform brings the popular as-a-service subscription model to the database industry. The company can support database services for a wide range of AI applications, including the latest gen-AI tech, as well as database search, mobile access, and analytic functions. Customers can also choose self-managed services through Couchbase's servers, with on-premises management for both multicloud and community apps.
Couchbase's database service has found success in a wide range of fields, including the gaming, healthcare, entertainment, retail, travel, and utility sectors. The company's customer base includes such major names as Verizon, UPS, Walmart, Cisco, Comcast, GE, and PayPal.
Turning to the financial results, we see that Couchbase reported its fiscal 2Q25 figures at the start of last month. The top line of $51.6 million was up almost 20% year-over-year and came in just over the forecast, beating expectations by nearly a half-million dollars. At the bottom line, the company ran a net loss of 6 cents per share in non-GAAP measures, but that was 3 cents per share better than had been anticipated.