The rapid technological advancements and digital transformation over the past 18 months have propelled the software industry’s growth. The industry’s continued growth should be supported by the evolving hybrid work environment and the growing demand to improve business processes. It is a good time to make a bet on small-cap, fundamentally sound software stocks CSG Systems Magic Software (MGIC) and (CSGS). Our proprietary rating system rates these stocks as a Strong Buy. So, let’s discuss.Businesses have been updating their processes to keep pace with the market’s shifting expectations and to enhance user experiences. Companies are looking at making significant investments in software development. Furthermore, hybrid cloud adoption is expected to accelerate next year to support employees and companies as the world’s dependence on software solutions increases.

The trends in cybersecurity measures, customer retention, low-code development adoption, and other software solutions should propel the industry’s growth. Investor optimism is evident in the iShares Expanded Tech Software Sector ETF’s (IGV), 19.2% return over the last year.

We believe that fundamentally strong small-cap stocks CSG Systems International, Inc. and Magic Software Enterprises Ltd., both NASDAQ:, could make excellent investments now. Our proprietary rating system also rates these stocks as Strong Buy.

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