The technology industry is on the path to robust growth, given the continuous innovations in artificial intelligence, cloud computing, and cybersecurity. Thus, investors could consider adding fundamentally sound tech stocks Adobe Inc. (ADBE), Leidos Holdings, Inc. (LDOS), and DocuSign, Inc. (DOCU), which analysts believe to be strong buys for 2025.

The tech industry is expected to continue strong growth in 2025, driven by advancements in AI, automation, and cloud computing. Increasing demand for cybersecurity solutions and data-driven innovation will further fuel expansion. The rise of 5G and IoT will create new opportunities in connectivity and digital transformation.

Moreover, the IT services landscape in the US is undergoing significant transformation driven by workforce dynamics and technological advancement. According to the Bureau of Labor Statistics, employment growth in the IT sector is projected to surge by 31% by 2026, with approximately 255,400 new IT jobs expected to be created during this timeframe.

Considering these factors, let’s take a look at the fundamentals of the three tech stock picks.

Adobe Inc. (ADBE)

ADBE operates as a diversified software company globally. It operates in three segments: Digital Media; Digital Experience; and Publishing and Advertising. The company offers products, services, and solutions that enable individuals, teams, and enterprises to create, publish, and promote content, and Document Cloud, a unified cloud-based document services platform.

On December 10, ADBE and Box, Inc. (BOX), the leading Intelligent Content Management platform, announced a partnership to redefine how digital media is managed, created, and shared in the enterprise. With Adobe Express available as the default image editor in Box, customers will be able to easily create more engaging content without leaving Box’s secure platform.

On December 3, ADBE and Amazon.com’s (AMZN) AWS expanded their strategic partnership to make Adobe Experience Platform (AEP) available on AWS to empower brands in deepening customer relationships with precise personalization. AEP delivers an actionable view of customers across every channel, with AI-driven insights ensuring timely and relevant customer experiences.

During the fourth quarter, which ended November 29, 2024, ADBE’s total revenue increased 11.1% from the prior year’s quarter to $5.61 billion. The company’s gross profit grew 13% from the year-ago value to $4.99 billion. The company’s non-GAAP operating income of $2.60 billion indicates growth of 10.8% over the previous year. Furthermore, the company reported non-GAAP net income of $2.13 billion and $4.81 per share, up 8.8% and 12.6% from the prior-year quarter, respectively.

Buoyed by its strong financial performance, the company provided its targets for fiscal year 2025. ADBE projects total revenue of $23.30 billion to $23.55 billion. Its Digital Media segment revenue is set at $17.25 billion to $17.40 billion, and its Digital Experience segment revenue at $5.80 billion to $5.90 billion. Also, the company expects non-GAAP EPS between $20.20 and $20.50.

Street expects ADBE’s revenue and EPS for the first quarter (ending February 2025) to increase 9.3% and 11% year-over-year to $5.66 billion and $4.97, respectively. Furthermore, the company has topped the consensus EPS and revenue estimates in all four trailing quarters, which is remarkable.

Shares of ADBE have plunged 25.8% over the past month to close the last trading session at $405.92.

ADBE’s POWR Ratings reflect its robust outlook. The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

ADBE has an A grade for Quality. It also has a B grade for Growth. It is ranked #14 out of 125 stocks in the Software – Application industry.

In addition to the POWR Ratings we’ve stated above, we also have ADBE ratings for Momentum, Value, Stability, and Sentiment. Get all ADBE ratings here.

Leidos Holdings, Inc. (LDOS)

LDOS provides services and solutions in the defense, intelligence, civil, and health markets in the United States and internationally. The company operates through Defense Solutions, Civil, and Health segments. It offers national security solutions and air, land, sea, space, and cyberspace systems.

On October 31, LDOS was awarded a contract by the U.S. Department of Health and Human Services through its Health Resources and Services Administration (HRSA) to modernize the Organ Procurement and Transplant Network (OPTN). The multiple-award, indefinite-delivery/indefinite-quantity contract has a total potential value of $235 million.

On October 30, LDOS received a contract to provide critical supply support for weapons systems that keep the U.S. Navy and Marine Corps forces mission-ready. The Technical Assistance for Repairables Processing (TARP) contract was awarded by the Naval Supply Systems Command Fleet Logistics Center, supporting NAVSUP’s Weapon Systems Support (WSS).

For the third quarter that ended September 27, 2024, LDOS’ revenues rose 6.9% year-over-year to $4.19 billion, and its non-GAAP operating income grew 34.4% from the year-ago value to $562 million. The company’s non-GAAP net income and EPS came in at $396 million and $2.93, reflecting growth of 39.9% and 44.3% from the prior year’s quarter, respectively.

Also, the company’s adjusted EBITDA rose 32.2% from the year-ago value to $596 million.

Street expects LDOS’ revenue for the fourth quarter (ended December 2024) to grow 3.8% year-over-year to $4.13 billion, and its EPS is expected to grow 13.6% year-over-year to $2.26 for the same quarter. Moreover, the company has topped the consensus revenue and EPS estimates in all of the trailing four quarters.

Over the past nine months, LDOS’ stock has surged 18.4% and 36.2% over the past year to close the last trading session at $149.44.

LDOS’ robust fundamentals are reflected in its POWR Ratings. It has an overall rating of A, which equates to a Strong Buy in our proprietary rating system.

The stock has an A grade Momentum and a B for Value and Quality. LDOS is ranked #6 out of 79 stocks in the Technology – Services industry.

Click here to access the additional LDOS ratings (Sentiment, Growth, and Stability).

DocuSign, Inc. (DOCU)

DOCU provides digital solutions like e-signatures, contract management, and industry-specific tools, serving businesses, government agencies, and professionals to streamline and secure agreement processes.

On November 20, 2024, DOCU launched “DocuSign for Developers,” empowering developers and businesses to enhance agreement management on its Intelligent Agreement Management platform. This initiative strengthens DOCU’s ecosystem and expands its integration and scalability capabilities, boosting its market appeal.

In the fiscal third quarter ended October 31, 2024, DOCU’s total revenue increased 7.8% year-over-year to $754.82 million. Its non-GAAP income from operations was $223.08 million, up 19% from the year-ago value. Moreover, its non-GAAP net income and non-GAAP net income per share stood at $188.50 million and $0.90, up 15.1% and 13.9% over the prior-year quarter, respectively.

Street expects DOCU’s revenue and EPS for the fourth quarter ending January 31, 2025, to increase 6.8% and 11.1% year-over-year to $760.94 million and $0.84, respectively. It surpassed the consensus EPS and revenue estimates in all of the trailing four quarters.

DOCU’s stock gained 12.1% over the past month to close the last trading session at $90.21.

DOCU’s POWR Ratings reflect bright prospects. The stock has an overall rating of A, which equates to a Strong Buy in our proprietary rating system.

The stock has an A grade for Quality and a B for Value and Growth. DOCU is ranked #5 out of 18 stocks in the Software – SAAS industry.

In addition to the POWR Ratings highlighted above, one can access DOCU’s ratings (Momentum, Stability, and Sentiment) here.

What To Do Next?

Get your hands on this special report with 3 low priced companies with tremendous upside potential even in today’s volatile markets:

3 Stocks to DOUBLE This Year >

ADBE shares were trading at $405.78 per share on Monday morning, down $0.14 (-0.03%). Year-to-date, ADBE has declined -8.75%, versus a -1.44% rise in the benchmark S&P 500 index during the same period.

About the Author: Nidhi Agarwal

Nidhi is passionate about the capital market and wealth management, which led her to pursue a career as an investment analyst. She holds a bachelor's degree in finance and marketing and is pursuing the CFA program. Her fundamental approach to analyzing stocks helps investors identify the best investment opportunities. More...

More Resources for the Stocks in this Article