and a handful of other software companies could offer
some much-needed upside
for investors as the sector bounces back after a difficult few months.
"We believe the first quarter of the calendar year marked the nadir for software stock fundamentals and arenow recommending investors increase software exposure," wrote RBC Capital Markets analyst Robert Breza in a note released Tuesday. "The next several quarters should see reduced earnings risk, easier comparisons, lower FX headwinds,
and stimulus spending benefits in many verticals."
Despite a recent slowdown in spending, Breza feels that infrastructure software companies such as Microsoft,
are all well positioned for the future. The analyst upgraded the three firms from "sector perform" to "outperform."
"Microsoft has the ability to outperform the market over the next 12 months," he wrote, explaining that improved
, Windows 7, and tight expense control will all
the company's growth.
Microsoft's share price has fallen more than 30% during the last 12 months, making any spending boost welcome.
The software giant, which missed analysts' earnings and revenue estimates in its
, is also keen to gain traction in a slew of markets outside of desktop software.
Microsoft CEO Steve Ballmer recently outlined the company's
, which includes online search, smartphones, servers and
Infrastructure software for desktops and servers is not the only attractive investment area at the moment, according to RBC Capital Markets. Breza also upgraded security software specialist
, which recently installed
as its new CEO and software-as-a-service (SaaS) companies