The software-as-a-service (SaaS) sector has been a cornerstone of the cloud computing revolution for over a decade. However, after years of aggressive growth and premium valuations, many SaaS stocks have seen a pullback amid rising interest rates, shifting enterprise budgets, and broader market volatility. As a result, several high-quality SaaS companies are now trading well below their previous highs, prompting renewed interest from investors looking for value in the tech space.
At the same time, there’s growing debate about the future of the SaaS model itself. In a recent statement, Microsoft CEO Satya Nadella declared that “SaaS as we know it is dead,” suggesting a transition toward AI agents that operate across systems rather than within siloed applications. He emphasized that many SaaS offerings today are essentially “CRUD apps with business logic,” and predicted the emergence of a new AI layer that could render traditional SaaS models less relevant over time.
While this shift is still unfolding, it raises important questions about how current SaaS companies will adapt, or be disrupted. In this context, the following list highlights ten SaaS stocks trading at a discount, offering a closer look at firms that may still have room to grow despite market headwinds and an evolving technological landscape.
A close-up of a server running a cloud-native platform, symbolizing the power of the software-as-a-service (SaaS) business area.
Our Methodology
To identify high-quality SaaS stocks, we sifted through stocks owned by SaaS ETFs. From the SaaS universe, we focused on firms with recurring revenue models, positive free cash flow, and robust growth trajectories. These companies span key SaaS verticals including identity management, cloud infrastructure, developer enablement, cybersecurity, and enterprise automation, sectors well-positioned to benefit from continued digital transformation and AI-led innovation. We narrowed the list by requiring each stock to offer at least 15% upside based on consensus 12-month analyst price targets. We have also added hedge fund sentiment for each stock as of Q1 2025.
Note: All data was recorded on July 21, 2025.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10 Best SaaS Stocks Trading at a Discount
10. ServiceNow, Inc. (NYSE:NOW)
Average analyst upside: 15.11%
Number of Hedge Fund Holders: 106
ServiceNow, Inc. (NYSE:NOW) is one of the best SaaS stocks to buy according to analysts. Barclays analyst Raimo Lenschow has lifted the firm’s price target on ServiceNow, Inc. (NYSE:NOW) to $1,200 from $1,085, maintaining an Overweight rating ahead of the company’s upcoming second-quarter results. The revised target reflects improving sentiment around enterprise software demand and growing optimism tied to recent field checks.
In a note to clients, Lenschow noted that while April began on a cautious note, the tone improved notably in May and June, particularly for firms with fiscal calendars aligned to the typical reporting cycle. ServiceNow, with its broad footprint across IT operations and digital workflows, is seen as well-positioned to benefit from this recovery in demand as Q2 earnings near.
The company has consistently executed on product expansion, particularly in AI-driven automation and workflow orchestration, which continues to attract interest from large enterprise clients. That momentum could support not just a solid quarterly report but also the potential for management to revise guidance upward, according to Barclays.
Shares of ServiceNow have outperformed many software peers in 2024, helped by consistent results and a clear roadmap tied to enterprise digitization. The price target hike suggests Barclays sees further room to run, especially if macro conditions remain stable and enterprise IT budgets continue trending upward in the second half of the year.
9. MongoDB, Inc. (NASDAQ:MDB)
Average analyst upside: 22.11%
Number of Hedge Fund Holders: 72
MongoDB, Inc. (NASDAQ:MDB) is one of the best SaaS stocks to buy according to analysts. Stephens has initiated coverage of MongoDB, Inc. (NASDAQ:MDB) with an Equal Weight rating and a price target of $247, reflecting a balanced view on the company’s near-term prospects. While acknowledging MongoDB’s strengths, particularly its flagship cloud offering, Atlas, the firm expressed caution around intensifying competition within the database software space.
In its note to investors, Stephens described Atlas as a “rare, high-quality asset,” underscoring its strategic value within MongoDB’s broader product ecosystem. Atlas has become a central growth driver for the company, benefiting from the ongoing shift to cloud-native applications and demand for flexible data solutions. However, the firm also pointed out that MongoDB is no longer the only game in town.
A growing number of competitors, including major cloud providers, are adding or enhancing document database features, long considered MongoDB’s key differentiator. That trend, according to Stephens, could gradually erode the company’s competitive edge, particularly as enterprises seek integrated solutions from vendors they already use.
Despite these concerns, the Equal Weight rating suggests that MongoDB’s current valuation largely reflects both its potential and the emerging risks. Investors may continue to see Atlas as a strong asset, but Stephens is signaling that the market landscape is shifting, and MongoDB will need to continue innovating to defend its position.
8. Workday, Inc. (NASDAQ:WDAY)
Average analyst upside: 27.34%
Number of Hedge Fund Holders: 85
Workday, Inc. (NASDAQ:WDAY) is one of the best SaaS stocks to buy according to analysts. Workday, Inc. (NASDAQ:WDAY) has recently introduced a new AI developer toolset, designed to provide enterprise developers with greater flexibility in building and integrating intelligent applications within its platform. Unveiled at the company’s annual developer conference, the toolset includes an Agent Gateway that allows for interaction between Workday’s AI agents and third-party systems, AI Widgets that enable customized workflows, and expanded APIs for natural-language queries and document classification. Workday also introduced enhancements to its Developer Copilot and command-line tools, making it easier for teams to deploy and manage AI features efficiently.
The move marks a significant step in Workday’s effort to deepen its footprint in the enterprise AI space, at a time when demand is growing for solutions that automate and personalize business operations. Rather than relying solely on pre-built applications, customers can now tailor AI capabilities more precisely to their own organizational needs, strengthening the platform’s appeal across HR and finance functions.
From an investor perspective, the stock has shown resilience but remains in a consolidation phase. Currently trading around $233, Workday is well off its highs but continues to attract attention thanks to its steady growth and strong product roadmap. While it may not offer immediate upside, the company’s focus on long-term innovation makes it a name to watch in the evolving enterprise software landscape.
7. Okta, Inc. (NASDAQ:OKTA)
Average analyst upside: 30.2%
Number of Hedge Fund Holders: 65
Okta, Inc. (NASDAQ:OKTA) is one of the best SaaS stocks to buy according to analysts. Okta, Inc. (NASDAQ:OKTA) announced new integrations with Palo Alto Networks, Inc. (NASDAQ:PANW) aimed at improving enterprise cybersecurity by unifying identity access and threat detection. The collaboration brings Okta’s Workforce Identity platform into tighter alignment with Palo Alto’s secure browser and threat operations tools, helping organizations enforce stricter access controls and respond faster to potential risks.
As part of the update, Okta’s platform now supports access to single sign-on applications exclusively through Palo Alto Networks’ Prisma Access Browser. This setup ensures that employees connect to sensitive workplace tools only from verified and secure environments, reducing exposure to phishing, credential theft, and session hijacking.
In parallel, Okta is linking its Identity Threat Protection system, powered by behavioral analytics and AI, with Palo Alto’s Cortex XSIAM, a security operations platform that aggregates and analyzes threat signals. This integration gives security teams a more complete view of user behavior and identity-related threats, helping prioritize and automate incident response.
For Okta, these updates reflect a broader push to move beyond access management and become a key player in holistic cybersecurity strategies. As enterprises face rising pressures from sophisticated attacks, partnerships like this signal a shift toward collaborative, layered defense models. While Okta’s stock has seen uneven performance over the past year, ongoing product evolution and strategic alignment with major security vendors may bolster its long-term position in the identity and access management space.
6. Elastic N.V. (NYSE:ESTC)
Average analyst upside: 30.54%
Number of Hedge Fund Holders: 52
Elastic N.V. (NYSE:ESTC) is one of the best SaaS stocks to buy according to analysts. Canaccord Genuity trimmed its price target on Elastic N.V. (NYSE:ESTC) to $110 from $115 while maintaining a Buy rating, following what it described as a solid fourth-quarter performance. The firm noted Elastic delivered better-than-expected results on both revenue and earnings, underscoring operational discipline and demand resilience despite a mixed macro environment.
Notably, Canaccord pointed out that while total revenue exceeded estimates, the composition of that beat leaned more heavily on Elastic’s self-managed offerings than on its cloud-native platform, Elastic Cloud. Cloud growth, a key long-term focus for the company, came in slightly below expectations, suggesting some variability in adoption pace or customer expansion.
Still, the firm emphasized that Elastic’s guidance for the coming quarters appears “amply conservative,” leaving room for the company to outperform its own targets. With cost management measures in place and increasing enterprise interest in search-powered AI tools, Canaccord believes Elastic is positioned to exceed expectations over the course of the year.
Shares of Elastic have rebounded in recent months as investor confidence has strengthened around the company’s ability to execute a balanced growth strategy. The lowered target reflects a more cautious near-term stance but doesn’t change the firm’s broader view that Elastic remains an attractive play in the search and observability space.
5. Adobe Inc. (NASDAQ:ADBE)
Average analyst upside: 31.51%
Number of Hedge Fund Holders: 111
Adobe Inc. (NASDAQ:ADBE) is one of the best SaaS stocks to buy according to analysts. Adobe Inc. (NASDAQ:ADBE) has rolled out new enhancements to its GenStudio platform, introducing AI-driven tools aimed at streamlining performance marketing efforts across major digital channels. The latest updates center on video and display ad creation, allowing businesses to generate and customize creative assets more efficiently for use on platforms such as Amazon Ads, Google Campaign Manager 360, LinkedIn, and Meta.
The company’s expanded offering integrates advanced features from Adobe Firefly Services, Custom Models, and Adobe Express, with a focus on improving collaboration between marketing and creative teams. These capabilities are designed to reduce bottlenecks in content production and enable faster execution of campaigns, particularly in environments that demand frequent iteration and personalization.
Adobe’s push into AI-assisted creative workflows comes as enterprise marketers increasingly seek scalable solutions to deliver high-quality content across a growing number of channels. Early adopters of GenStudio’s innovations include prominent global brands and agencies such as The Coca-Cola Company, Dentsu, The Estée Lauder Companies, Lumen Technologies, Newell Brands, and Publicis Groupe.
By embedding generative AI deeper into the production pipeline, Adobe aims to help clients shorten time to market while maintaining brand consistency and creative impact. As competition intensifies in digital advertising, these tools could offer a strategic edge to businesses looking to keep pace with evolving consumer expectations.
4. Salesforce, Inc. (NYSE:CRM)
Average analyst upside: 33.99%
Number of Hedge Fund Holders: 140
Salesforce, Inc. (NYSE:CRM) is one of the best SaaS stocks to buy according to analysts. BMO Capital’s Keith Bachman has reduced his price target on Salesforce, Inc. (NYSE:CRM) to $335 from $350, while maintaining an Outperform rating on the stock. In a note to clients, Bachman pointed to tempered expectations around the company’s newer initiatives, particularly Data Cloud and Agentforce, despite generally favorable feedback from the field.
While these products are viewed as strategically important, BMO flagged concerns about the pace of adoption and the timeline for meaningful revenue contribution. Bachman noted that investor enthusiasm around Salesforce’s AI-driven offerings may need to be tempered by the reality that translating innovation into financial performance often takes time.
Still, Salesforce’s valuation remains compelling, especially when measured against its projected high single-digit revenue growth. The company continues to benefit from its broad suite of enterprise applications and embedded customer relationships, which provide a stable base from which to layer new capabilities.
Salesforce shares have been relatively stable in recent months, trading below their 52-week high but holding gains made earlier in the year. As the company works to integrate and scale its AI-focused platforms, analysts like Bachman are encouraging investors to remain focused on long-term potential rather than short-term acceleration. The lowered price target reflects near-term caution, but not a shift in the firm’s overall positive view on Salesforce’s strategic direction.
3. Five9, Inc. (NASDAQ:FIVN)
Average analyst upside: 36.36%
Number of Hedge Fund Holders: 44
Five9, Inc. (NASDAQ:FIVN) is one of the best SaaS stocks to buy according to analysts. Piper Sandler has trimmed its price target on Five9, Inc. (NASDAQ:FIVN) to $31 from $36, while maintaining an Overweight rating on the stock. The revision follows what the firm described as one of its weakest rounds of field checks in recent memory, with particular softness noted around bookings activity.
While Five9 continues to hold a solid position in the contact center as a service (CCaaS) market, recent indicators suggest demand trends have been uneven. Piper’s findings point to a slowdown in deal flow, which could signal caution among enterprise customers or longer sales cycles as budget scrutiny increases.
Despite the disappointing signals from the latest checks, Piper has not changed its fundamental stance on the company. The Overweight rating reflects continued confidence in Five9’s long-term prospects, underpinned by its cloud-native architecture, expanding partner ecosystem, and product development in areas like AI-powered customer engagement.
Shares of Five9 have been under pressure over the past year, reflecting broader challenges across the enterprise software space and a shift in investor focus from growth to profitability. Still, for long-term investors, the current valuation may offer an entry point if Five9 can stabilize near-term performance and reaccelerate bookings momentum in the quarters ahead.
2. HubSpot, Inc. (NYSE:HUBS)
Average analyst upside: 36.85%
Number of Hedge Fund Holders: 61
HubSpot, Inc. (NYSE:HUBS) is one of the best SaaS stocks to buy according to analysts. Barclays has lowered its price target on HubSpot, Inc. (NYSE:HUBS) to $675 from $745 but reiterated its Overweight rating ahead of the company’s second-quarter earnings. In a note to clients, the firm pointed to a favorable setup for software names reporting on-cycle, including HubSpot, citing an encouraging rebound in demand indicators as the quarter progressed.
While April showed signs of hesitation in the market, Barclays noted that momentum picked up meaningfully in May and June, based on its latest channel checks. That shift has given the firm increased confidence in a stronger Q2 performance, with the potential for upside in both results and forward guidance.
Despite the lowered price target, which reflects recalibrated valuation metrics more than a change in fundamental outlook, Barclays continues to view HubSpot as well-positioned. The company remains a key player in the mid-market CRM and marketing automation space, and its consistent product innovation has helped it maintain steady customer growth even in a cautious spending environment.
HubSpot shares have seen volatility this year alongside broader tech names, but sentiment has been gradually improving with signs of stabilization in software demand. As Q2 earnings approach, investors will be watching closely to see whether HubSpot’s results confirm the more constructive tone Barclays has picked up from the field.
1. Verint Systems Inc. (NASDAQ:VRNT)
Average analyst upside: 40.16%
Number of Hedge Fund Holders: 19
Verint Systems Inc. (NASDAQ:VRNT) is one of the best SaaS stocks to buy according to analysts. Rosenblatt Securities has initiated coverage on Verint Systems (NASDAQ: VRNT) with a Buy rating and a whopping $40 price target, pointing to what it sees as a compelling disconnect between the company’s market value and its underlying potential. The firm highlights Verint’s extensive AI capabilities, supported by a deep reservoir of customer interaction data built up over more than a decade.
According to Rosenblatt, this long-running data accumulation gives Verint a meaningful edge in training and refining AI models, particularly in the increasingly competitive field of customer engagement technology. The firm sees the company’s shift toward a full-stack, AI-driven engagement platform as a natural evolution from its roots in analytics and security software.
This transformation is already underway, with Verint repositioning its portfolio around automation, workforce optimization, and conversational intelligence. Rosenblatt believes the market has yet to fully recognize the strategic implications of this pivot, especially as enterprises increase investment in technologies that improve customer experience at scale.
Verint shares have traded in a narrow range in recent quarters, reflecting investor caution around legacy software names. However, Rosenblatt’s initiation suggests a growing belief that Verint could re-rate higher as the benefits of its AI transition become more visible in both financial results and customer wins.
While we acknowledge the risk and potential of VRNT as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than VRNT and that has 10,000% upside potential, check out our report about this cheapest AI stock.
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