In this article, we will look at the 10 Profitable SaaS Companies for 2026.
On February 10, Dan Ives from Wedbush appeared on a CNBC Television interview to share his thoughts on the software sell-off. Ives has recently moved some of the beaten-down software names into his top 20 AI picks for the year. Two of the prominent names include Salesforce (down more than 43% over the past 12 months) and ServiceNow (down more than 48% over the same period). This bold move by Ives is based on the conviction that the software will remain the heart and lungs of the AI revolution. Ives added that currently, the market is still in the early stage of a 10-year AI buildout and is focused on GPUs and infrastructure. However, in the long-term software is going to be key in terms of presenting and justifying the use cases of the infrastructure that is being built today.
Ives argued that to say companies such as Salesforce and ServiceNow are structurally broken is one of the most disconnected arguments he has heard in his career. He elaborated that, considering the market penetration and deep integration with enterprises of these companies, they will easily add numerous new customers as AI use cases start to present themselves. Ives believes that the current valuations of most of the software companies do not factor in 20-30% incremental revenue, making them look expensive at the surface level.
With that, let’s take a look at the 10 Profitable SaaS Companies for 2026.
Our Methodology
To curate the list of 10 Profitable SaaS Companies for 2026, we used the Finviz stock screener, WSJ, and Insider Monkey’s Q3 2025 database as our sources. Using the screener, we aggregated a list of SaaS companies with more than 15% net margins (TTM). We narrowed our list to stocks with the highest net income (TTM). Lastly, we ranked the stocks in ascending order of the number of hedge fund holders sourced from Insider Monkey’s database.
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 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
10 Profitable SaaS Companies for 2026
10. SAP SE (NYSE:SAP)
Number of Hedge Fund Holders: 34
SAP SE (NYSE:SAP) is one of the Profitable SaaS Companies for 2026. On February 10, Nay Soe Naing from Berenberg Bank reiterated a Buy rating on the stock with a €250 price target. The bullish sentiment comes amidst growing concerns regarding GenAI disrupting the SaaS business model, which has led to a valuation reset within the software sector.
The share price of SAP SE (NYSE:SAP) has fallen more than 14.72% over the past month. Earlier on February 4, Frederic Boulan from Bank of America Securities released a research note highlighting SAP as an attractive investment amidst a valuation reset. He noted,
“the space is now trading at 13.1x EV/EBITDA vs 5y average of 21x. U.S. software compressed 35% in the past 6 months from 32.3x to 21x.”
SAP has also undergone significant repricing and trades at 20.7x 2027 earnings, down from 34x a year ago. Regardless, Boulan has a Buy rating on SAP SE (NYSE:SAP) with a €302 price target. He noted that the current prices overly discount the company’s strengths and growth potential. BofA used a reverse discounted cash flow model with unchanged 2026–2030 forecasts to find that the current price implies a -3% revenue CAGR post-2030, a 14% revenue drop by 2035, and 20% EBIT decline.
BofA finds the current valuation unrealistic as it assumes customer churn acceleration and a halt to on-premise to cloud migration, which the bank notes to be “unlikely.” Analyst Boulan highlighted that software companies such as SAP SE (NYSE:SAP) have strong domain expertise and complex business integrations, which make them less vulnerable to being replaced by AI tools.
SAP SE (NYSE:SAP) develops enterprise application software, primarily ERP systems that centralize data management and streamline business processes like finance, supply chain, and HR.
9. Paychex, Inc. (NASDAQ:PAYX)
Number of Hedge Fund Holders: 53
Paychex, Inc. (NASDAQ:PAYX) is one of the Profitable SaaS Companies for 2026. On February 10, Andrew Nicholas from William Blair reiterated a Hold rating on the stock without disclosing any price target. Earlier, on January 26, Ramsey El Assal from Cantor Fitzgerald initiated Paychex, Inc. (NASDAQ:PAYX) with a Sell rating and a $98 price target.
Cantor Fitzgerald doubts the ability of Paychex to speed up its organic revenue growth as the competition in the small and medium business SMB continues to increase. In addition, the economic headwinds also add further concerns. The firm also highlighted the company’s recent acquisition of Paycor, which it believes positions Paychex in larger markets. However, Cantor calls the deal a largely defensive move with unclear benefits for long-term organic growth.
During fiscal Q2 2026, the company delivered 18.28% top-line growth along with a 21% increase in adjusted operating income. Management raised the lower end of the adjusted diluted EPS outlook for 2026 from 9% growth to 10%, as the company expects interest on funds held for clients to be at the high end of the anticipated range.
Overall, Wall Street remains bullish on Paychex, Inc. (NASDAQ:PAYX), with analysts’ 12-month median price target reflecting more than 21% upside from the current level.
Paychex, Inc. (NASDAQ:PAYX) provides integrated human capital management (HCM) solutions focused on payroll, HR, benefits, and insurance for small- to medium-sized businesses mainly in the U.S. and Europe. It leverages its SaaS platforms like Paychex Flex and SurePayroll to offer services.
8. Zoom Communications, Inc. (NASDAQ:ZM)
Number of Hedge Fund Holders: 54
Zoom Communications, Inc. (NASDAQ:ZM) is one of the Profitable SaaS Companies for 2026. Wall Street is bullish on Zoom Communications, Inc. (NASDAQ:ZM) ahead of its fiscal Q4 2026 earnings expected to be released on February 25.
Recently, on February 4, Alex Zukin from Wolfe Research upgraded the stock from Peer Perform to Outperform with a $115 price target. Earlier, on January 27, Wedbush raised its price target on the stock from $95 to $110 and maintained an Outperform rating.
Analyst Zukin from Wolfe Research noted the company’s strength in contact center and phone businesses, along with its emerging voice AI features, are expected to accelerate growth. In addition, the analyst views Zoom’s current valuation as a low-growth “cash cow,” despite evidence of accelerating growth and a strong balance sheet.
Similarly, Wedbush also expressed confidence in Zoom’s AI strategy and its potential to improve its enterprise customer base. The firm’s research shows that the company’s AI products are witnessing robust double-digit growth in ARR.
That said, Zoom Communications, Inc. (NASDAQ:ZM) expects fiscal Q4 2026 revenue in the range of $1.230 billion and $1.235 billion, along with a non-GAAP income from operations in the range of $477.0 million and $482.0 million.
Zoom Communications, Inc. (NASDAQ:ZM) provides an AI-powered collaboration platform called Zoom Workplace for modern work and human connection. It offers tools like video meetings, team chat, phone systems, whiteboards, contact centers, and productivity apps such as docs and tasks, enhanced by AI Companion.
7. Automatic Data Processing, Inc. (NASDAQ:ADP)
Number of Hedge Fund Holders: 57
Automatic Data Processing, Inc. (NASDAQ:ADP) is one of the Profitable SaaS Companies for 2026. Wall Street has a mixed opinion on Automatic Data Processing, Inc. (NASDAQ:ADP) since the release of its fiscal Q2 2026 results on January 28.
Recently, on February 9, David Grossman from Stifel Nicolaus reiterated a Hold rating on the stock and lowered the price target from $280 to $270. Earlier on January 28, BMO Capital also lowered the price target from $288 to $281, while maintaining a Market Perform rating on the stock.
The cautious rating comes despite Automatic Data Processing, Inc. (NASDAQ:ADP) exceeding estimates in fiscal Q2 2026. The company posted a revenue of $5.36 billion, reflecting 6.16% year-over-year increase and ahead of expectations by $21 million. Moreover, the EPS of $2.62 also topped estimates by $0.05. Management attributed the performance to strong business bookings growth and progress on its strategic priorities.
Analysts at Stifel Nicolaus noted that the reduced price target reflects a reassessment amid AI-related factors, but they still see value in the stock. Automatic Data Processing, Inc. (NASDAQ:ADP) trades at a 17% premium to the equal-weight S&P 500. The analyst noted that this is the lowest since the financial crisis compared to its historical 50%-60% range. Stifel Nicolaus finds this a compelling risk/reward profile for the company.
Automatic Data Processing, Inc. (NASDAQ:ADP) provides cloud-based human capital management (HCM) solutions worldwide, focusing on payroll processing, HR outsourcing, and related services.
6. Palantir Technologies Inc. (NASDAQ:PLTR)
Number of Hedge Fund Holders: 81
Palantir Technologies Inc. (NASDAQ:PLTR) is one of the Profitable SaaS Companies for 2026. On February 10, Palantir Technologies Inc. (NASDAQ:PLTR) signed a multi-year contract renewal with Airbus to keep powering Skywise, which is an open data platform for civil aviation. The extension builds upon a decade-long partnership, which started in 2015 with Palantir’s French team handling development.
Management noted that this strategic expansion comes at a critical time when the aerospace industry is under pressure to innovate. As a result of this collaboration, Palantir will continue providing its solutions and technology as per Airbus’s requirements.
That said, on February 10, Daiwa Capital Markets upgraded the stock from Hold to Buy, but lowered the price target from $200 to $180. Earlier, on February 3, Deutsche Bank raised the price target on Palantir Technologies Inc. (NASDAQ:PLTR) from $160 to $200 and maintained a Hold rating on the stock.
Analysts at Daiwa noted that the company’s Q4 earnings left a positive impression; however, valuation concerns resulted in the firm maintaining its Hold rating. Palantir Technologies Inc. (NASDAQ:PLTR) posted $1.41 billion in revenue in Q4 2025, reflecting 70% increase year-over-year and ahead of expectations by $65.44 million. Moreover, the EPS of $0.05 also topped consensus by $0.02. The performance was driven by a 137% year-over-year growth in US commercial revenue and 66% year-over-year increase in US government revenue.
Palantir Technologies Inc. (NASDAQ:PLTR) builds software platforms for data integration and analytics, helping governments and businesses analyze vast datasets to uncover patterns and make decisions.
5. Autodesk, Inc. (NASDAQ:ADSK)
Number of Hedge Fund Holders: 83
Autodesk, Inc. (NASDAQ:ADSK) is one of the Profitable SaaS Companies for 2026. On February 9, Reuters reported that Autodesk has sued Google over alleged “Flow” trademark infringement to market competing AI tools used for making film, TV, and gaming production.
Autodesk, Inc. (NASDAQ:ADSK) highlighted in the complaint it filed with the San Francisco federal court that the company started using Flow in 2022 for visual effects and was surprised to see Google launching Flow software in 2025 for the same customers. The complaint also notes that despite assurances, Google filed a secretive trademark application in Tonga to support US claims and later marketed the software at events, including the Sundance Film Festival. The complaint said,
”Google’s false representation that it would always use a combination of its house mark and Flow was intended to buy time to allow it to swamp Autodesk’s place in the market.”
That said, Wall Street is bullish on Autodesk. Recently, on February 2, Kash Rangan from Goldman Sachs upgraded the stock from Hold to Buy without disclosing any price targets. On the same day, J.P. Morgan also upgraded the stock from Hold to Buy and maintained the $319 price target.
Autodesk develops 3D design, engineering, and entertainment software for industries like architecture, construction, manufacturing, and media. Some of its key products include AutoCAD, Revit, Inventor, Maya, and 3ds Max.
4. Adobe Inc. (NASDAQ:ADBE)
Number of Hedge Fund Holders: 88
Adobe Inc. (NASDAQ:ADBE) is one of the Profitable SaaS Companies for 2026. Analysts are downgrading Adobe Inc. (NASDAQ:ADBE) over concerns that AI might destroy the company’s business. The share price has fallen more than 42% over the past 12-months.
Recently, on February 9, Ben Reitzes from Melius Research reiterated a Sell rating on the stock and lowered the price target from $310 to $270. Earlier on January 12, Gabriela Borges from Goldman Sachs downgraded Adobe from Buy to Sell with a $290 price target.
Earlier, Reitzes from Melius had noted that the SaaS companies are at risk of being taken over by AI. The analyst highlighted that software companies can face multiple contractions as AI progresses. He pointed out that the Figma IPO has increased competition for Adobe amidst AI threats.
In addition, Borges from Goldman based his cautious outlook on Adobe’s relatively weaker growth metrics compared to peers. He noted that the company shows 10% (next twelve months) revenue growth and 10% EPS growth as compared to 11% growth and 18% growth for its peers, respectively. This places Adobe at the bottom quartile for PEG valuation.
Overall, Wall Street’s 12-month median price target still reflects more than 50% upside from the current level, with 55% analysts covering the stock maintaining a Buy rating.
Adobe Inc. (NASDAQ:ADBE) is a global technology company that creates tools to help people and businesses design, manage, and deliver digital content.
3. Shopify Inc. (NASDAQ:SHOP)
Number of Hedge Fund Holders: 91
Shopify Inc. (NASDAQ:SHOP) is one of the Profitable SaaS Companies for 2026. The company recently reported robust fiscal Q4 2025 results. Shopify Inc. (NASDAQ:SHOP) grew its quarterly revenue by 31% year-over-year to $3.67 billion, surpassing the Street’s estimates of $3.59 billion. The EPS of $0.57 also topped analysts’ consensus of $0.51.
“2025 was Shopify at full throttle – driving compounding growth, while laying the rails for the new era of AI commerce,”
Harley Finkelstein, President of Shopify.
Management attributed the quarterly and full-year performance to be driven by multiple growth factors, including International revenue growth, Offline revenue growth, and B2B GMV growth. Notably, the company maintained 19% free cash flow margins, marking ten consecutive quarters of double-digit free cash flow margins. This comes as Shopify is investing in Catalog, Sidekick, Universal Commerce Protocol, and its full platform of commerce solutions.
That said, earlier on February 9, MoffettNathanson upgraded Shopify Inc. (NASDAQ:SHOP) from Neutral to Buy and raised the price target from $122 to $150. The firm finds Shopify as an “unusually attractive entry point” and believes it is a “long-term winner in the AI commerce wars.”
Shopify Inc. (NASDAQ:SHOP) is a Canadian‑based global commerce technology company that provides an all‑in‑one e‑commerce platform for businesses of all sizes.
2. Intuit Inc. (NASDAQ:INTU)
Number of Hedge Fund Holders: 96
Intuit Inc. (NASDAQ:INTU) is one of the Profitable SaaS Companies for 2026. On February 11, Intuit Inc. (NASDAQ:INTU) launched a specialized “Construction Edition” for its Intuit Enterprise Suite. The new solution is an AI-powered ERP software designed for mid-sized construction companies.
Management highlighted that the new edition brings together project management, finances, and operations into one platform. This will allow construction companies, which are a $2 trillion industry, to tackle siloed data, manual processes, rising material costs, and poor visibility into project profitability.
That said, earlier on February 2, BMO Capital lowered the price target on Intuit Inc. (NASDAQ:INTU) from $810 to $624 while maintaining an Outperform rating on the stock. The rating is based on the firm’s annual survey of US tax filers, which revealed mostly positive trends for the company’s TurboTax product line. The TurboTax Full Service has expanded its local strategy and provides promising upsell/cross-sell opportunities, noted the firm. BMO remains positive on the stock, despite the AI concerns and year-to-date share weakness.
Intuit Inc. (NASDAQ:INTU) provides financial management, payments & capital, compliance, and marketing products and services in the US. The company operates in four segments: Global Business Solutions, Consumer, Credit Karma, and ProTax.
1. Salesforce, Inc. (NYSE:CRM)
Number of Hedge Fund Holders: 119
Salesforce, Inc. (NYSE:CRM) is one of the Profitable SaaS Companies for 2026. Wall Street is bullish on Salesforce, Inc. (NYSE:CRM) as it approaches fiscal Q4 2026 earnings, to be released on February 25. Recently, on February 5, Oppenheimer reiterated a Buy rating on the stock with a $300 price target. On the same day, Stifel Nicolaus also reiterated a Buy rating with a $300 price target.
Analysts at Stifel noted that Agentforce adoption is one of the key factors for the company’s resilience. The firm finds Agentforce to be the differentiating factor to compete with AI leaders, boost cloud growth, and surpass estimates. Management’s commentary shows that rising Agentforce token consumption reflects that the company is progressing towards its goal.
For fiscal Q4 2026, Salesforce, Inc. (NYSE:CRM) expects revenue in the range of $11.13 billion -$11.23 billion, reflecting 11% to 12% growth. Wall Street expects the company to post $11.18 billion in revenue along with a GAAP EPS of $1.57.
Salesforce, Inc. (NYSE:CRM) designs and develops cloud-based enterprise software for customer relationship management. Its solutions encompass customer service and support, sales force automation, digital commerce, marketing automation, collaboration, community management, industry-specific solutions, and Salesforce platforms. It also offers training, guidance, support, and advisory services.
While we acknowledge the potential of CRM to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than CRM and that has 100x upside potential, check out our report about this cheapest AI stock.
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