Are Enterprise Software Stocks Recession-Proof?
Summary
Taken together, the message these discussions delivered was clear: we should expect volatility to continue as the Fed raises the low interest rates which catalyzed economic growth.Recently, Salesforce CEO Marc Benioff noted that the “economy is ripping.” This is the strongest buying market for software he’s ever seen and incredible demand from customers to rebuild their systems continues.The highest quality stocks – supported by the themes above – will remain favorable and perform well, while less proven, higher cash-burn names with negative trends and inability to prove out their growth model will take the brunt of a ‘risk-off’ mentality from the market.The “right” range depends on software and customer type but without the ability to scalably and repeatedly deliver a product future cash flows are uncertain.OpenView’s Disclaimer for This Market Report This article is for informational purposes only, and is not intended as investment advice or as an offer or a solicitation to buy or sell any securities.