There is possibly to be hundreds of billions or trillions in infrastructure spending over the next years, and there are many ways that investors can profit from it. In this article, we talk about why software company Autodesk might be the next big winner in this sector.

The company makes computer-assisted design software. Most of us will know it somewhere in this capacity, but it is a much bigger company. It also tries to give not just this kind of computer modeling, but also software that works specifically inside the construction industry, from the planning stage, all the way to manufacturing.

They are really attempting to be a one stop company for all construction projects. And this business division is one I really love. 

Architectural, engineering, and construction, which is three ideas into a single suite of software. They have made a move to the cloud over the past three years, so they had a time where they were selling their licenses as one time fees and then adding on yearly renewals. By changing over to a cloud-focused model subscription like most of their peers, they have juiced up their cash.

It’s a large company, but it is still growing at a fast rate. The most recent quarter revenues increase by around 16% y/y. Their billings, which is somewhat of a better indicator for future growth were higher by 29%. Now, why I love the company in the future for an infrastructure play is that they have such a crucial role in global infrastructure and investment in infrastructure. They are really well diversified across the world, it’s got a footprint in all major continents.

I like that executives have worked on the theme of convergence. I spoke about this before, the idea that you will help a company go through its planning and construction. What this means in software is that you are making one fluid piece of software that works for design and the design during the manufacturing stage, which are two very similar things.

Autodesk is the kind of company that is almost like a sleeper stock. I like to say it is comparable to Adobe and Intuit two very visible brands that do not get a lot of attention, but usually compound year after year. Over time, they give not only double digit growth, they give double digit stock growth too. That is what Autodesk has been doing. I believe they are going to keep doing that.

Author: Steven Sinclaire

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