10 Best SaaS Stocks to Buy According to Hedge Funds

In this article, we discuss the 10 Best SaaS Stocks to Buy According to Hedge Funds.

The SaaS sector has had a rough 2026. Caught between mounting AI disruption fears and early but uncertain signs of recovery, software stocks have kept investors guessing.

Investor disappointment was visible on April 23, when IBM and ServiceNow plunged despite both beating first-quarter revenue and profit estimates. IBM fell 10.3% as slower revenue growth exposed weakness in its software business, including its Red Hat cloud unit. ServiceNow dropped nearly 15% after flagging delays in Middle East deals tied to the Iran conflict. The selloff didn’t stop there.

Microsoft, Adobe, CrowdStrike, Intuit, and Datadog all moved lower the same day.

Analysts also weighed in on the backdrop, with J.P. Morgan noting that analysts remain nervous amid AI disruption fears even after valuations had already dropped significantly. By that point, the iShares Expanded Tech-Software ETF was down about 16% in 2026, while the iShares Semiconductor ETF had surged over 43%.

On May 19, investor sentiment shifted slightly.

Workday, ServiceNow, and Salesforce each gained between 1.4% and 2.4%, and cybersecurity names like CrowdStrike and Zscaler joined the rally. However, the move did not signal a full recovery, as the iShares Expanded Tech-Software ETF remained down 12.2% year-to-date as of that session.

What it did show is that the market is getting pickier, and hedge fund positioning in the SaaS space increasingly reflects that shift, separating names with strong, deeply embedded products from those facing structural headwinds.

Thus, let’s now turn to our list of the best SaaS stocks to buy according to hedge funds.

Our Methodology

To curate our list for this article, we relied on the financial media and screeners to identify all software-as-a-service (SaaS) stocks. Next, we assessed hedge fund sentiment surrounding these stocks using Insider Monkey’s hedge fund database, which tracks over 1,000 elite hedge fund managers and their portfolios. We finally ranked the list in ascending order based on the number of hedge funds holding bullish positions in each stock as of Q1 2026.

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 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).

10. Veeva Systems Inc. (NYSE:VEEV)

Veeva Systems Inc. (NYSE:VEEV), with significant hedge fund interest, ranks among the 10 best SaaS stocks to buy according to hedge funds. As of Q1 2026, 62 hedge funds held bullish positions in the stock, representing $2.95 billion in aggregate value, as per Insider Monkey data.

This week, Veeva Systems Inc. (NYSE:VEEV) is accelerating its efforts to deepen its footprint across the life sciences industry, securing major global CRM commitments while rolling out new AI-driven automation tools for drug development.

On May 28, 2026, Veeva Systems Inc. (NYSE:VEEV) announced that Kindeva, a contract development and manufacturing organization, is adopting Veeva Quality Cloud to unify its global network of sites onto a single platform. The deployment includes Veeva QualityDocs, Veeva QMS, Veeva Training, and Veeva LearnGxP.

Kindeva said the platform will standardize quality assurance and training processes, eliminate data silos, and support growth across regions and therapeutic areas.

That announcement followed a pair of CRM commitments disclosed on May 27, 2026.

Merck KGaA (Darmstadt, Germany) committed globally to Veeva Vault CRM, with the company’s CIO citing consistent processes and data connectivity as priorities. On the same day, Teva Pharmaceuticals also committed to Vault CRM globally, with Teva saying the platform will provide a technical foundation for commercial execution.

Vault CRM is part of Veeva Systems Inc. (NYSE:VEEV)’s broader Vault CRM Suite and includes AI agents designed to drive commercial efficiency.

Also on May 27, 2026, Veeva Systems Inc. (NYSE:VEEV) unveiled Falcon, an agentic platform built for life sciences drug development processes. Falcon works with Veeva Development Cloud applications across clinical, regulatory, and safety functions. Initial focus areas include trial master file document intake, health authority correspondence, and safety case triage. CEO Peter Gassner called it Veeva’s first offering in agentic labor, with early adopter availability planned for November 2026.

Veeva Systems Inc. (NYSE:VEEV) is a provider of cloud-based solutions for the global life sciences industry. Its offerings include cloud software, artificial intelligence, data, and business consulting.

9. Autodesk, Inc. (NASDAQ:ADSK)

With significant hedge fund interest, Autodesk, Inc. (NASDAQ:ADSK) secures a spot on our list of the 10 best SaaS stocks to buy according to hedge funds. As of Q1 2026, 67 hedge funds held bullish positions in the stock, representing $3.17 billion in aggregate value, as per Insider Monkey data.

On May 28, 2026, Autodesk, Inc. (NASDAQ:ADSK) announced a $3.6 billion deal to acquire MaintainX, a maintenance and operations software firm. MaintainX expects to achieve more than $135 million in annualized recurring revenue for 2026. Autodesk plans to fund the transaction with a combination of cash on hand and debt financing, with the deal expected to close later this fiscal year. CEO Andrew Anagnost said the goal is to bring operational expertise, contextual data, and workflows that enhance Autodesk’s ability to use AI to converge digital and physical worlds.

The announcement came alongside first-quarter results.

Autodesk reported revenue of $1.93 billion, above the analyst estimate of $1.89 billion. Adjusted EPS came in at $2.99, topping the $2.84 consensus. Autodesk, Inc. (NASDAQ:ADSK) also raised its fiscal 2027 outlook, guiding for revenue of $8.16 billion to $8.22 billion, up from its prior range of $8.10 billion to $8.17 billion. Adjusted EPS guidance was lifted to $12.40 to $12.65, from $12.29 to $12.56 previously. Shares were down about 3% in extended trading following the report.

On May 29, 2026, Wells Fargo lowered its price target on Autodesk to $330 from $350 while keeping an “Overweight” rating. The firm called the quarter clean but said it expects the high-multiple acquisition to raise questions around the core business trajectory as model tailwinds begin to fade. The firm said it continues to favor Autodesk, Inc. (NASDAQ:ADSK)’s end markets and dominant competitive position and sees a case for strategic fit.

Autodesk, Inc. (NASDAQ:ADSK) designs software and related services, known for products such as AutoCAD, BIM Collaborate Pro, Revit, Civil 3D, Fusion 360, InfraWorks, Inventor, Maya, PlanGrid, Shotgun, and 3ds Max.

8. MongoDB, Inc. (NASDAQ:MDB)

With significant hedge fund interest, MongoDB, Inc. (NASDAQ:MDB) secures a spot on our list of the 10 best SaaS stocks to buy according to hedge funds. As of Q1 2026, 74 hedge funds held bullish positions in the stock, representing $2.58 billion in aggregate value.

On May 28, 2026, MongoDB, Inc. (NASDAQ:MDB) reported first-quarter fiscal 2027 revenue of $687.6 million, up 25% year-over-year. Subscription revenue was $666.1 million, also up 25%, while services revenue rose 22% to $21.5 million. Non-GAAP EPS came in at $1.32, compared to $1.00 in the year-ago period.

Meanwhile, non-GAAP income from operations was $123.2 million, up from $87.4 million a year earlier. Free cash flow reached $197.5 million, nearly double the $105.9 million generated in the prior-year quarter. RPO grew 88% year-over-year to $1.46 billion, with current RPO up 69% to $766.3 million. MongoDB, Inc. (NASDAQ:MDB) ended the quarter with $2.4 billion in cash, cash equivalents, short-term investments, and restricted cash.

CEO CJ Desai said MongoDB, Inc. (NASDAQ:MDB) continues to show strong profitability while driving revenue growth and cited momentum across enterprise use cases and emerging AI opportunities. MongoDB also acquired Clarity Business Solutions to strengthen its U.S. Federal vertical and formalized a strategic partnership with LangChain to position MongoDB Atlas as a backend for production AI agents.

Looking ahead, MongoDB, Inc. (NASDAQ:MDB) guided for second-quarter revenue of $729 million to $734 million and non-GAAP EPS of $1.58 to $1.61. Full-year fiscal 2027 revenue guidance was raised to $2.92 billion to $2.96 billion, with non-GAAP EPS of $5.95 to $6.14.

On May 29, 2026, UBS raised its price target on MongoDB, Inc. (NASDAQ:MDB) to $350 from $275 and kept a “Neutral” rating, calling the quarter largely in line and noting results were driven mainly by its core business rather than early-stage AI demand.

MongoDB, Inc. (NASDAQ:MDB) is a developer data platform company. Its platform combines a globally distributed operational database with a set of data services that help development teams manage a growing range of application requirements.

7. Datadog, Inc. (NASDAQ:DDOG)

With significant hedge fund interest, Datadog, Inc. (NASDAQ:DDOG) secures a spot on our list of the 10 best SaaS stocks to buy according to hedge funds. As of Q1 2026, 80 hedge funds held bullish positions in the stock, representing $2.54 billion in aggregate value.

On May 27, 2026, BofA raised its price target on Datadog, Inc. (NASDAQ:DDOG) to $260 from $225 and kept a “Buy” rating on the shares. The firm expects demand for best-of-breed observability and security platforms to grow as enterprises modernize to the cloud and AI adds complexity to their environments. BofA told investors it sees those dynamics driving continued strong results from the company.

That view followed a solid first quarter.

On May 7, 2026, Datadog, Inc. (NASDAQ:DDOG) reported revenue of $1.006 billion, up 32% year-over-year. Non-GAAP EPS came in at $0.60, with non-GAAP operating income of $223 million and a 22% non-GAAP operating margin. Operating cash flow was $335 million, and free cash flow reached $289 million. The company ended the quarter with $4.8 billion in cash, cash equivalents, and marketable securities.

Customer growth also continued, as Datadog, Inc. (NASDAQ:DDOG) had about 4,550 customers with ARR of $100,000 or more as of March 31, 2026, up 21% from roughly 3,770 a year earlier.

Looking ahead, Datadog, Inc. (NASDAQ:DDOG) guided for second-quarter revenue of $1.07 billion to $1.08 billion and non-GAAP EPS of $0.57 to $0.59. For the full year, the company expects revenue of $4.30 billion to $4.34 billion and non-GAAP EPS of $2.36 to $2.44.

Datadog, Inc. (NASDAQ:DDOG) is a SaaS-based observability and security platform that provides cloud monitoring, analytics, and cybersecurity solutions for applications and infrastructure.

6. Snowflake Inc. (NYSE:SNOW)

Snowflake Inc. (NYSE:SNOW), with significant hedge fund interest, ranks among the 10 best SaaS stocks to buy according to hedge funds. As of Q1 2026, 80 hedge funds held bullish positions in the stock, representing $2.91 billion in aggregate value.

Fresh analyst support came for Snowflake Inc. (NYSE:SNOW) following its fiscal Q1 2027 results.

On May 28, 2026, Oppenheimer raised its price target on Snowflake Inc. (NYSE:SNOW) to $295 from $250 and kept an “Outperform” rating on the shares. The firm said Snowflake delivered impressive first-quarter results well ahead of expectations, with product revenue growth of 33.9% year-over-year and acceleration in both core data and new AI workloads. Oppenheimer pointed to Cortex Code topping 7,100 accounts in its first quarter as an encouraging AI signal, noting it is already driving increased consumption.

Snowflake Inc. (NYSE:SNOW) released its results on May 27, 2026.

First-quarter product revenue came in at $1.39 billion, ahead of the analyst consensus estimate of $1.32 billion. Snowflake Inc. (NYSE:SNOW) raised its fiscal 2027 product revenue forecast to $5.84 billion from $5.66 billion. CEO Sridhar Ramaswamy said the increase reflected strength in the core data platform business and meaningful uplift from AI capabilities. For the second quarter, Snowflake guided for product revenue of $1.415 billion to $1.420 billion, above the prior analyst estimate of $1.37 billion.

Meanwhile, Snowflake Inc. (NYSE:SNOW) announced a five-year, $6 billion deal with Amazon Web Services to use AWS Graviton processors and AI infrastructure. The agreement includes deeper product integrations around generative and agentic AI, expanded go-to-market efforts through AWS Marketplace, and workload migrations aimed at helping businesses move from experimenting with AI to deploying it routinely.

Snowflake Inc. (NYSE:SNOW) is an American cloud-based data platform company. It offers an AI Data Cloud platform, which enables organizations to build, use, and share data, applications, and AI.

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