With the upcoming consumer price index (CPI) in May most likely to show a rebound in overall inflation, everyone is considering the possibility of a severe recession in the US economy. Recently, Bernstein software analyst Mark Moerdler said that in this case, investors need to assess which companies are better suited to deal with this negative economic situation. "We have seen a significant increase in customer inquiries and want to know what will happen to the software / cloud sector in a recession," he wrote. "We believe that the quality of [corporate business] will shine, and companies with higher exposure to corporate income flows, deeper moats around their businesses, and strong or at least improved profit margins are likely to perform better. The good news is that investors now have the opportunity to buy software stocks at low prices. Software stocks have fallen along with the overall market this year, with iShares Expanded Tech-Software Sector (IGV), which tracks the widely watched software industry index, down 25% this year, while the s & p 500 is down 13% over the same period.

Here are three software stocks that Modeler believes will outperform the broader market:

$Microsoft Corp (MSFT.US) $

"Microsoft Corp has a very wide range of sources of income as well as organizations and consumers of all forms and sizes," he wrote. "overall, we think the company is doing well. The software giant's cloud computing division also has less contact with smaller vulnerable start-ups and consumer Internet customers than its main competitors, the analyst said. He has a target price of $365 for Microsoft Corp shares. U. S. stocks closed on June 9, with Microsoft Corp's share price at $264.79. Last week, Microsoft Corp slightly lowered his financial guidance for the second quarter of this year due to the negative impact of foreign exchange fluctuations. However, at a time when many other technology companies are emphasizing more difficult macroeconomic conditions, the small downgrade in Microsoft Corp's financial forecast could be a sign that the company's business is more resilient than its peers.

$Oracle Corp (ORCL.US) $

"Oracle Corp has always been one of the safest stocks in the software sector," Modeler wrote. For security and some profit growth, Oracle Corp may be our best investment choice in software / cloud during the recession. He pointed out that Oracle Corp's database needs to run the necessary business transaction data for large companies, which means it is more difficult to cut back than other discretionary software purchases. He has a target price of $102 for Oracle Corp's shares, which closed at $69.22 on June 9.

$Adobe Inc (ADBE.US) $

"although Adobe Inc's solution is indeed used by advertisers, their customers are mainly large corporate companies," Modeler wrote. Adobe Inc will not charge his Experience Cloud (experience Cloud) based on the volume of advertising, so the business may be relatively immune except for a very severe recession. The analyst also said that Adobe Inc's creative professional customers rely on the software to generate income, so they are unlikely to cancel their subscriptions. He has a target price of $600 for Adobe Inc's shares, which closed at $426.42 on June 9.