3 Historically Cheap Software Stocks Begging to Be Bought Amid the Recent Tech Rout

Core Viewpoint - The current bear market for software stocks presents a significant opportunity for long-term investors seeking value, despite major stock indexes reaching new highs [1][4]. Group 1: Market Overview - The Dow Jones Industrial Average recently surpassed 50,000, the S&P 500 has gained at least 16% in six of the last seven years, and the Nasdaq Composite has outperformed both [1]. - The iShares Expanded Tech-Software Sector ETF is nearly 28% below its all-time high, indicating a challenging environment for software investors [2]. Group 2: Salesforce - Salesforce is identified as a bargain amid the software sell-off, with a market cap of $174 billion and a current price of $185.36 [6][7]. - The company has embraced AI as a growth driver, with its Agentforce AI platform generating over $500 million in annual recurring revenue (ARR), up 330% year-over-year [8]. - Salesforce's remaining performance obligation (RPO) surged 11% to $29.4 billion, and it maintains a forward price-to-earnings (P/E) ratio of 14.8, a 52% discount to its five-year average [9][10]. Group 3: Adobe - Adobe is also considered a historically cheap stock, with a closing price of $266.90, the lowest since October 2019 [12]. - Despite concerns about generative AI impacting its software solutions, Adobe's Digital Media segment ended with $19.2 billion in ARR, up 11.5% year-over-year [15]. - The company's forward P/E of 10.1 is 61% below its average since 2020, indicating a favorable valuation [18]. Group 4: Okta - Okta, a cloud-based cybersecurity company, is viewed as a strong investment opportunity, with a current price of $84.99 and a market cap of $15 billion [20]. - The company reported a 17% year-over-year increase in RPO to nearly $4.3 billion and a 37% increase in net cash from operating activities [23]. - Okta's forward P/E of 24 reflects a significant drop from previous years, making it an attractive option for investors [24].