4 Software Stocks Poised to Outshine Expectations This Earnings Season

Core Industry Trends - Software stocks are benefiting from the digitalization wave and strong adoption of AI, including generative AI and Agentic AI [1] - The proliferation of SaaS, migration to cloud platforms, and demand for hybrid work solutions are major tailwinds for software companies [1] - Increased customer-centric approaches and subscription-based models are driving recurring revenues and affordability for small and medium-sized businesses [5] Factors Supporting Software Stocks - The rise of AI-powered applications in various sectors, including voice recognition and telemedicine, is positively impacting software companies [2] - The adoption of cloud-based services, IoT, AR/VR devices, and 5G deployment is aiding software stock performance [3] - Rising cyber threats are prompting enterprises to invest more in cloud-based security solutions, shifting preference towards software-defined models [4] Company-Specific Insights - CoreWeave is expected to report revenues between $1.26 billion and $1.3 billion, with a year-over-year revenue increase of 207% and a backlog of $30.1 billion [8][9] - BILL Holdings anticipates first-quarter revenues of $390.6 million, reflecting a 9% year-over-year increase, while earnings are projected to decline by 19.1% [11] - Affirm Holdings expects first-quarter revenues of $885 million, indicating a 26.7% year-over-year growth, with earnings per share improving from a loss of 31 cents to a profit of 11 cents [14][15] - Unity Software forecasts revenues of $447.6 million for the third quarter, with a slight year-over-year growth of 0.2% and an expected earnings per share improvement from a loss of 31 cents [17] Strategic Developments - CoreWeave is capitalizing on the generative AI boom, focusing on scaling capacity and enhancing services to drive strong momentum [10] - BILL is leveraging AI to enhance its solutions for SMBs and is integrating generative AI to improve customer experience [12][13] - Affirm is expanding its partnerships and entering new markets, including the U.K. and Western Europe, to drive growth [16] - Unity Software is transitioning its product mix towards the AI-powered Unity Vector platform, which is expected to deliver long-term value despite short-term revenue friction [18][19]