In this piece, we will look at the best SaaS stocks trading at a discount.
The software-as-a-service, or SaaS, sector isn’t the same in the AI era. As AI enables businesses to code software with it, SaaS firms have struggled as investors grow wary about their ability to sustain revenue growth. We discussed the impact on SaaS valuations last year in September as part of our coverage of the best cloud stocks to buy according to short sellers and pointed out that not only were valuations at a historic low, but also that only 1% of SaaS firms were seeing a median forward growth estimate of 30%+.
Naturally, one part of the impact on the SaaS sector is the enterprise adoption of AI. On this front, Goldman Sachs’ senior software analyst, Kash Rangan, made some important comments in October. When asked on CNBC’s Closing Bell Overtime on October 9th whether OpenAI was appearing to be the point of failure for the entire AI ecosystem, he commented that “the thing that I am looking for is, the enterprise adoption of AI.” He added that “the thing that I try to focus on is enterprise market. What is the return on investment in the enterprise market?” At the time, Kash shared that while some segments, such as coding and customer support, were showing positive signs, “the revenue picture across the tail of enterprise software segments is still a little feeble.”
More recently, on December 4th, CNBC’s Deirdre Bosa discussed enterprise AI spending. Bosa, discussing reports of Microsoft reducing its sales quote, shared that “the big picture here is that enterprise AI spending, it’s not lining up with the early narrative. Companies are leaning into model usage, but they are moving slower on agents.” She added that “the spend that we’re actually seeing is flowing into model access and increasingly, that is Anthropic’s Claude.”
Our Methodology
To compile our list of the 10 best SaaS stocks trading at a discount, we first used a stock screener to identify software infrastructure and application stocks with PE ratios less than 15 and year to date stock price decline of 5% and above through December 15th. We then used Insider Monkey’s Hedge Fund database to rank 10 stocks according to the largest number of hedge fund holders, as of Q3 2025. The list is sorted in ascending order of hedge fund sentiment.
Why do we care about what hedge funds do? 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 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
10 Best SaaS Stocks Trading at a Discount
10. Cemtrex, Inc. (NASDAQ:CETX)
Number of Hedge Fund Holdings: 1
Cemtrex, Inc. (NASDAQ:CETXP) is a technology company that operates in the SaaS industry through its security business, Vicon, which provides video management software. The firm made a key set of announcements on December 11th when it revealed that it was nearing the close of an acquisition of a Texas aerospace and defense engineering company. Cemtrex, Inc. (NASDAQ:CETXP) added that it had decided to terminate the acquisition of a robotics integration firm. At the same time, it outlined that it had signed an LOI to acquire an industrial services business in Tennessee.
Cemtrex, Inc. (NASDAQ:CETXP) also discussed its Vicon business in the update. The firm shared that it had started to ship units of its NEXT product line. Cemtrex, Inc. (NASDAQ:CETXP)’s NEXT products are AI-powered modular cameras that seek to reduce installation times. They also provide analytics capabilities on the edge, and as part of its update, Cemtrex, Inc. (NASDAQ:CETXP) added that it committed to Vicon’s “long term transformation through its software and AI-enabled offerings.” The firm also issued a little under 4.8 million shares on December 11th. The purpose of the issuance was to meet certain debt requirements and raise capital. Cemtrex, Inc. (NASDAQ:CETXP)’s acquisition of Texas-based Invocon will bolster the firm’s presence in the aerospace and defense industry.
9. XBP Global Holdings, Inc. (NASDAQ:XBP)
Number of Hedge Fund Holdings: 11
XBP Global Holdings, Inc. (NASDAQ:XBP) is a Texas-based software company that provides payment and technology services to businesses. December 12th was a great day for the stock as it closed a whopping 989% higher after gaining $5.20 during the day’s trading. XBP Global Holdings, Inc. (NASDAQ:XBP)’s shares rose after the firm announced a five-year agreement with the German firm BG-Phoenics. The contract is valued at €21.5 million, and through it, the firm will provide its customer with mail processing by digitizing 148 million pages over the contract’s lifetime. Management noted that the deal allows XBP Global Holdings, Inc. (NASDAQ:XBP) to grow its presence in the European regulated industry.
XBP Global Holdings, Inc. (NASDAQ:XBP)’s deal with the German firm came less than two weeks after the firm had announced another deal with the Swedish regional public authority, Region Uppsala. Terming it an “engagement,” the firm outlined that it planned to work with the Swedish entity by managing administrative and healthcare records. The deal was another where XBP Global Holdings, Inc. (NASDAQ:XBP) executed on its strategy of targeting European public center entities in their bid towards digitization. The firm has also partnered with the New York City Department of Finance for parking violation payment processing.
