Wall Street likes software stocks for the long term. Here are top picks from Goldman, Citi and more

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CNBC Pro takes a look at the favorite software stocks of Wall Street banks, including one 'prime bounce-back candidate.'

Software stocks were a pandemic darling, but their popularity waned as economies reopened. Nevertheless, the tech sub-sector remains a key part of several long-term secular trends, such as cloud computing and artificial intelligence. "We continue to believe in the structural positives of software, specifically, its ability to drive significant return on investment to customers," Goldman Sachs ' analysts, led by Gabriela Borges, wrote in a note on Jan. 3.

It gives the stock a price target of $230. Goldman also likes tax technology software firm Vertex for its potential to "drive higher cloud margins over time." The bank said it believes the company's cloud transition story is "underappreciated" by the market. It gives the stock a price target of $21. Oracle is Bernstein's "number one" pick in the software space heading into a recession.

 

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