Top Network Software Stocks to Keep an Eye on in a Booming Market

The Zacks Communication-Network Software industry, including key players like A10 Networks (ATEN) and Ondas (ONDS), is experiencing growth driven by the shift to cloud computing and the rapid deployment of 5G networks. The industry has appreciated by 23% over the past year, outperforming the Zacks Computer and Technology sector (10.6%) and the S&P 500 (11.6%). Current valuation metrics show the industry trading at 2.68X EV/Sales, compared to the S&P 500’s 5.19X and the sector’s 7.08X.

Despite the positive outlook from increased demand for network security and the integration of AI in solutions, the sector faces challenges due to macroeconomic conditions, including deferred capital spending by small and medium businesses. The industry’s Zacks Rank of #93 places it in the top 38% of over 250 Zacks industries, indicating strong near-term prospects.

A10 Networks reports steady earnings forecasts, with a consensus estimate of 88 cents per share for 2025, while Ondas anticipates revenues of at least $25 million for 2025, supported by a backlog of $16.8 million. However, Ondas has seen a year-to-date decline of 34.4% in share price.