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The technology sector remains a popular source of investment ideas due to the rapid growth often seen by the best companies. Not all technology stocks are winners, but identifying companies with strong financials, consistent results and a bright future is critical for investors looking for long-term market results.
These two software companies offer attractive investment opportunities due to their market leadership and clear paths to continued success. Let’s take a look at why these are two of the best stocks to buy without any hesitation.
Service now
Most businesses need two types of software. Public software helps the company reach the world, and internal software helps run the company efficiently. Service now (NYSE: NOW) helps companies manage their operations in areas such as human resources, technology and customer service management.
ServiceNow has a long history of impressive performance and steady growth, and its recently reported second quarter 2024 was no exception. Subscription revenue grew 23%, and current remaining performance obligations (revenue that will be recognized over the next twelve months) grew 22%.
The company also has a long track record of expanding its customer relationships. In the second quarter, the number of customers with an annual contract value (ACV) of $1 million or more grew by 15%. This metric has risen consecutively every quarter for the past two years.
ServiceNow also puts a lot of focus on it artificial intelligence (AI) with its generative AI product called Now Assist. According to management, Now Assist has become the fastest growing new product in the company’s history, with new ACV doubling in the first quarter.
Adobe
Not only Adobe (NASDAQ: ADBE) the clear leader in digital creation, but it has also been a market-beating stock over the long term. Over the past decade, Adobe’s stock returns have exceeded it S&P500 by almost 500 percentage points.
Adobe’s creative products, including Photoshop and Illustrator, are the industry standard, and the company’s long-term financial results demonstrate its power in the marketplace. In the second quarter of 2024, Adobe’s revenue grew 11% and earnings per share (EPS) grew 24%.
The fact that operating results exceed revenue demonstrates Adobe’s operational efficiency, which is ultimately good for shareholders. Some of Adobe’s profits are used to that buy back shares. Over the past five years, the company has reduced its outstanding shares by almost 9%.
Like ServiceNow, Adobe is building AI tools into many of its products. Instead of seeing AI as a threat to creativity, Adobe sees it as an assistant. Instead of spending time on mundane tasks, creators can use AI for that purpose, allowing them to spend more time on the creative aspects of their projects. If Adobe can convince its users that these tools are worthwhile, it could be an additional revenue stream for the company.
The low point for investors
As leaders in their fields, both ServiceNow and Adobe must continue to deliver strong financial results to fend off the competition. Their interest in implementing AI into their products should help them maintain their competitive position as long as these investments continue to generate additional revenue and profits. Both companies are well positioned for the future, prompting them to buy shares without hesitation.
Should you invest €1,000 in ServiceNow now?
Before purchasing shares in ServiceNow, consider the following:
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Jeff Santoro has positions in Adobe and ServiceNow. The Motley Fool holds positions in and recommends Adobe and ServiceNow. The Motley Fool has one disclosure policy.
2 unstoppable tech stocks to buy without any hesitation was originally published by The Motley Fool