“Get me out” is what Jeffrey Favuzza, an equity trader with Jefferies, says he is hearing from clients in an interview with Bloomberg, as selling pressure intensifies across software stocks in what he has dubbed the “SaaSpocalypse, an apocalypse for software-as-a-service stocks.” He further said, “People are just selling everything and don’t care about the price.”
What sparked this SaaSpocalypse? Anthropic PBC’s release of plugins for Claude Cowork which threaten to disrupt the software industry as a whole. Toni Kaplan, an analyst at Morgan Stanley, had this to say regarding Anthropic’s release:
”Anthropic launched new capabilities for its Cowork to the legal space, heightening competition. We view this as a sign of intensifying competition, and thus a potential negative.”
Other analysts had similar takes. Thomas Shipp, LPL Financial’s head of equity research, speaking to investors, said:
”The fear with AI is that there’s more competition, more pricing pressure, and that their competitive moats have gotten shallower, meaning they could be easier to replace with AI.”
Billy Fitzsimmons, Piper Sandler analyst, wrote:
”Our concern is that the seat-compression and vibe coding narratives could set a ceiling on multiples.”
As a result, $285 billion in market capitalization was wiped out across the software, financial services, and asset management sectors in a single day, despite 67% of software companies in the S&P beating revenue expectations in the recent quarter, according to Bloomberg data.
Given investor sentiment-driven wipeouts across the software industry, which have spilled over to the broader market, many stocks are trading near their 52-week lows. A good portion of these stocks are trading at those beaten-down levels, despite good fundamentals and growth prospects over the next year. We will now take a look at 11 of the best beaten-down growth stocks to buy now.
Our Methodology
We shortlisted U.S.-listed stocks with at least $2 billion in market capitalization and at least three analysts covering the stocks. From this universe, we narrowed to stocks trading within 10% of their 52-week lows, with a normalized EPS growth forecast of at least 10% over the next year and at least 25% median projected upside from analysts. We then filtered the list to only contain stocks with at least 15 hedge fund holders, according to Insider Monkey’s proprietary hedge fund database, which tracks 978 hedge funds as of Q3 2025. Finally, we selected the 11 stocks with the highest projected upsides. We have taken the data from Yahoo Finance and CNN.com.
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).
Note: All data presented are as of 8 February 2026.
11. Snap Inc. (NYSE:SNAP)
Share Price: $5.22
52-Week Low: $5.17
Upside: 53.26%
Next Year’s EPS Growth: 20.59%
Number of Hedge Fund Holders: 50
Snap Inc. (NYSE:SNAP) is one of the 11 Best Beaten Down Growth Stocks to Buy Now.
On February 6, Stifel upgraded its rating on Snap to a “Hold” from “Sell”. Despite the rating upgrade, the firm did not change its target price of $5.50 on the shares. In a research note to investors, the firm said that Snap’s risk/reward profile is now more reasonable at current share prices. They also believe that the bad news, namely declining North America user base, timid advertising growth, and unclear specifics on the company’s agreement with Perplexity, have already been priced in.
This rating change comes on the heels of Snap’s Q4-2025 results, which were released on February 4. The report showed that average daily active users (DAU) dropped 0.6% QoQ globally (from 477 million to 474 million). The decline was even more significant in North America, where DAU fell 4.1% QoQ (from 98 million to 94 million).
Snap’s advertising revenue in the 4th quarter, meanwhile, grew 5% YoY to $1.48 billion (from $1.41 billion). This segment was a drag on overall revenue growth, which grew 10% YoY to $1.72 billion (from $1.56 billion).
Finally, Snap noted that the revenue uplift from the Perplexity deal, announced last November 2025, will likely be delayed because the two sides have yet to finalize a broader rollout plan. For reference, this is what was initially said about the agreement:
”Under the agreement, Perplexity will pay Snap $400 million over one year, through a combination of cash and equity, as we achieve global rollout. Revenue from the partnership is expected to begin contributing in 2026.”
Stifel believes that Snap’s stock price, which has fallen 37% year-to-date, already reflects these setbacks. Other firms covering Snap appear to share this sentiment, as the implied upside (based on the median analyst target price of $8.00, per CNN) remains high at 53.26%, despite a series of recent target price cuts.
Snap Inc. (NYSE:SNAP) is a technology company operating in North America, Europe, and internationally. The company offers Snapchat, a visual messaging application with various tabs including Camera, visual messaging, Snap Map, Stories, and Spotlight.
10. Vertex Inc. (NASDAQ:VERX)
Share Price: $15.73
52-Week Low: $14.78
Upside: 62.11%
Next Year’s EPS Growth: 18.54%
Number of Hedge Fund Holders: 22
Vertex Inc. (NASDAQ:VERX) is one of the 11 Best Beaten Down Growth Stocks to Buy Now.
Piper Sandler, on February 3, downgraded its call on Vertex to Neutral from Overweight as a new analyst assumed coverage of the stock. The firm also cut its target price by 37.5% to $20 (from $32). Concerns about seat compression due to the impact of artificial intelligence, specifically vibe coding, were key reasons for the rating downgrade and target price cut. Piper Sandler emphasized that its decision does not reflect the firm’s conviction regarding Vertex’s upcoming Q4 earnings, which are scheduled to be released on February 11.
For context, on January 30, Anthropic launched plugins for Claude Cowork, which would “tailor Claude to specific job functions like sales, legal, and financial analysis.” As part of the launch, Anthropic released 11 open-source plugins (Productivity, Enterprise Search, Plugin Create, Sales, Finance, Data, Legal, Marketing, Customer Support, Product Management, and Biology Research) for all paid users.
This release erased $285 billion in market capitalization for software, financial services, and asset management stocks, according to Bloomberg. Thomas Shipp, LPL Financial’s head of equity research, speaking to investors, said:
”Why do I need to pay for software, the thinking goes, if internal development of these systems now takes developers less time with AI?”
Vertex’s stock price fell 20.3% to $14.78 (from $18.55) because of this news, before rebounding slightly to $15.73. Despite the sell-off as well as the recent downgrade from Piper Sandler, most analysts are still convinced that Vertex is a good investment. The median target price, according to CNN, is $25.50, which implies an upside of 62.11%.
Vertex Inc. (NASDAQ:VERX) is a provider of tax compliance software solutions for enterprises and mid-market companies. The company is located in King of Prussia, Pennsylvania, and was established in 1978 by Ray and Antoinette Westphal.
9. Atlassian Corporation (NASDAQ:TEAM)
Share Price: $94.72
52-Week Low: $92.32
Upside: 63.64%
Next Year’s EPS Growth: 16.06%
Number of Hedge Fund Holders: 60
Atlassian Corporation (NASDAQ:TEAM) is one of the 11 Best Beaten Down Growth Stocks to Buy Now.
Bernstein, on February 6, trimmed its target price on Atlassian by 4.6% to $290 (from $304) but retained its Outperform call on the stock. The firm said that while Atlassian’s Q2-2026 “was a good quarter on most dimensions,” investor concerns about the impact of artificial intelligence could prove to be a challenge. Nonetheless, Bernstein is convinced that TEAM has enough of a moat and can survive the industry disruption from generative AI.
The updated target price comes right after Atlassian released its Q2-2026 results on February 5. The report showed revenue growth accelerating to 23.3% YoY in Q2-2026 (vs. 20.6% in Q1-2026), with total quarterly revenue reaching $1.59 billion. The data center and marketplace segments drove this acceleration, with growth rates in these segments accelerating to 20.4% (from 11.0% in Q1-2026) and 9.1% (from 3.3% in Q1-2026) YoY, respectively. The cloud segment, meanwhile, saw steady growth of 26.0% YoY (from 26.0% in Q1-2026).
Due to the strong 2nd quarter performance, Atlassian’s management has raised its guidance for the rest of the fiscal year. They now expect FY2026 revenue growth to average out to ~22% (Cloud: 24.3%, Data Center: 20.0%, and Marketplace: 6.0%).
Atlassian Corporation (NASDAQ:TEAM) is a software-as-a-service company that focuses on team collaboration and productivity software such as Jira, Confluence, and Loom. The company is based in San Francisco, California, and was founded in October 2002 by Michael Cannon-Brookes and Scott Farquhar.
8. Procore Technologies Inc. (NYSE:PCOR)
Share Price: $51.29
52-Week Low: $49.90
Upside: 68.65%
Next Year’s EPS Growth: 30.55%
Number of Hedge Fund Holders: 45
Procore Technologies Inc. (NYSE:PCOR) is one of the 11 Best Beaten Down Growth Stocks to Buy Now.
On February 6, KeyBank cut its target price on Procore by 12.1% to $80 (from $91) but retained its Overweight call on the stock. The recent pullback in valuation multiples across the software industry, due to Wall Street’s jitters regarding the impact of generative AI, was the main catalyst for this cut in target price.
The firm, however, sees the company’s upcoming Q4-2025 results, which will be released on February 12, as a potential catalyst for Procore’s stock. KeyBank expects Procore’s revenue and current remaining performance obligation (cRPO) in Q4 to beat street estimates, with normalized growth rates at around the mid-teens. TD Cowen and UBS shared this sentiment regarding a potential revenue beat in their own research notes.
A second key item that KeyBank expects to hear more about during the upcoming earnings call is the company’s recent acquisition of Data Grid. Last January 20, Procore announced that it had acquired Datagrid. Steve Davis, Procore’s President of Product and Technology, had this to say about the deal:
”The combination of Datagrid and Procore is transformative. Together, we’re providing one of the broadest AI portfolios in construction. By integrating Datagrid’s AI and deep search capabilities, we will enable customers to bridge the gaps between siloed data and initiate actions across their entire ecosystem. This connectivity unlocks the true value of construction data, allowing our customers to innovate faster and focus on building the world around us.”
As of today, however, the exact financial terms of the deal have not yet been disclosed.
Procore Technologies Inc. (NYSE:PCOR) is a cloud-based provider of construction management software. The company is based in Carpinteria, California, and was founded in 2002 by Craig F., Courtemanche Jr., and Steven C. Zahm.
7. BellRing Brands Inc. (NYSE:BRBR)
Share Price: $19.52
52-Week Low: $19.35
Upside: $69.06
Next Year’s EPS Growth: 14.12%
Number of Hedge Fund Holders: 45
BellRing Brands Inc. (NYSE:BRBR) is one of the 11 Best Beaten Down Growth Stocks to Buy Now.
TD Cowens, on February 4, trimmed its target price on BellRing by 11.1% to $24 (from $27). Despite the TP cut, the firm retained its Hold rating on BRBR. TD Cowens cited rising competitive intensity in the shake category, especially in the warehouse club channel, as the key reason for the target price cut. The firm added that higher raw material costs, specifically whey protein, also contributed (albeit to a lesser degree) to the TP cut. This update comes right after BellRing released its Q1-FY2026 results on February 3.
The earnings briefing showed BRBR’s revenue growth slowing down to 1%, as the ready-to-drink (RTD) protein shake segment showed weakness in the 1st quarter. Revenue from this segment fell 2.2% YoY, as sales in the warehouse club channel collapsed by 14.2% YoY. For TD Cowens, this consumption trend indicates rising competitive intensity in the RTD protein shake market.
Additional data points in BellRings’ supplementary data appear to support this hypothesis. For one, retailers’ inventory has increased in seven of the last eight quarters, suggesting that stock stayed on the shelves longer.
In response to the weak Q1-FY2026 sales, Darcy H. Davenoport, Bell Ring President and CEO, said that the company will be increasing the frequency of its promotional activities. TD Cowens said that while these demand-generating initiatives could boost revenue growth, they would also eat into margins, which are already getting squeezed due to higher whey protein costs.
BellRing Brands Inc. (NYSE:BRBR) distributes ready-to-drink (RTD) protein shakes, ready-to-mix (RTM) powders, and nutrition bars across multiple channels such as warehouse clubs, drugstores, e-Commerce, specialty stores, and convenience stores. The company is located in St. Louis, Missouri, and was founded in March 2019.
6. Pinterest Inc. (NYSE:PINS)
Share Price: $19.60
52-Week Low: $19.05
Upside: 78.57%
Next Year’s EPS Growth: 13.79%
Number of Hedge Fund Holders: 66
Pinterest Inc. (NYSE:PINS) is one of the 11 Best Beaten Down Growth Stocks to Buy Now.
On February 3, KeyBanc trimmed its target price on Pinterest by 12.5% to $35 (from $40) while retaining its Overweight call on the company. The firm cited falling valuation multiples (P/E and EV/EBITDA) across the industry as the main factor influencing its decision. KeyBanc also added that it expects a volatile quarter for Pinterest due to intensifying competition for incremental ad budgets.
Mizuho echoed similar sentiments, cutting its target price on Pinterest to $35 (from $45) on February 3 while keeping an Outperform rating on the shares. The firm sees similar challenges in the short run for Pinterest’s fundamentals but believes that these are already priced into the shares.
These updates come just after Pinterest announced its global restructuring plan on January 26. The plan will involve cutting 15% of the company’s workforce over the next nine months and will cost $35 million to $45 million initially in restructuring charges.
BofA, in its January 28 research note, estimated that this move could lead to $300 million in annualized savings for Pinterest and could boost the company’s EBITDA margins to the low-30s. The bigger takeaway, however, is that this restructuring plan could be an indication that the weak ad revenue seen in 2025 has carried over to the 1st quarter of 2026, thus triggering the need for this restructuring plan.
Since the announcement of this restructuring plan, Pinterest’s stock price has fallen as much as 25.4% to $19.32 (from $25.90), before recovering slightly to $19.60. Despite this fall and the recent string of target price cuts over the past week, analysts still have a bullish view on Pinterest. This conviction is evident in the median analyst target price of $35.00, according to CNN data, implying a potential upside of 78.57%.
Pinterest Inc. (NYSE:PINS) is a pinboard-style photo-sharing website, headquartered in San Francisco, California, and founded in October 2008 by Benjamin Silbermann, Paul C. Sciarra, and Evan Sharp.
5. Flutter Entertainment plc (NYSE:FLUT)
Share Price: $152.53
52-Week Low: $148.10
Upside: 78.65%
Next Year’s EPS Growth: 18.20%
Number of Hedge Fund Holders: 95
Flutter Entertainment plc (NYSE:FLUT) is one of the 11 Best Beaten Down Growth Stocks to Buy Now.
Canaccord cut its target price on Flutter Entertainment by 10% on February 3 to $270 (from $300). Despite the TP reduction, it retained its Buy rating on FLUT’s shares. The firm noted that investor sentiment on digital gambling stocks soured in January, due to state reports showing slowing growth in handles (total $ bets) in December (which likely worsened in January), leading to a selloff. Canaccord, however, thinks that this was an overreaction by the market, as higher hold rates (% of $ bets earned as revenue by a gambling operator) more than offset the handle decline. Nonetheless, the firm believes that Flutter’s current price, combined with the lowered expectations from the market, provides an attractive entry point for investors today.
On the topic of handle and hold rates, the Nevada Gaming Control Board released its December 2025 statistics on January 28. The report showed total handle for December 2025 of $747 million, which is 9.3% lower than the $824 million recorded the prior year. Despite this decline in total bets, revenue rose 351.6% to $68 million (from $15 million), as the hold rate improved to 9.05% from 1.81%.
US-wide figures showed a similar trend. Compiled data from 35 states showed a total handle for December 2025 of $13.5 billion, which is 14.4% lower than the $15.8 billion recorded the previous year. Despite this decline in total bets, revenue rose 78.4% to $1.7 billion (from $0.9 billion), as the hold rate improved to 12.3% (from 5.9%).
Flutter Entertainment plc (NYSE:FLUT) is an online betting and gaming company, operating mainly in the United States, the UK, Ireland, and Australia. The company is based in New York, New York, and was founded in 1988.
4. ServiceNow Inc. (NYSE:NOW)
Share Price: $100.75
52-Week Low: $98.94
Upside: 83.64%
Next Year’s EPS Growth: 20.38%
Number of Hedge Fund Holders: 104
ServiceNow Inc. (NYSE:NOW) is one of the 11 Best Beaten Down Growth Stocks to Buy Now.
On February 2, Goldman Sachs added ServiceNow to its US Conviction List, citing its belief that the company can grow 20% YoY organically through 2029, given its “still robust expansion opportunities in new domains.” The firm currently has a Buy call on the shares, with a target price of $216.
This addition to the US Conviction List came after ServiceNow released its Q4-2025 results last January 28. Their earnings briefing showed revenue metrics growing at over 20% across the board. Total revenue grew 20.5% YoY to $3.6 billion (from $3.0 billion), subscription revenue grew 21.0% YoY to $3.5 billion (from $2.9 billion), current remaining performance obligations grew 25.0% YoY to $12.9 billion (from $10.3 billion), and remaining performance obligations grew 26.5% YoY to $28.2 billion (from $22.3 billion).
For 2026, ServiceNow’s management expects to grow subscription revenue by 20.5%-21.0%. This growth will primarily be driven by industry expansion through strategic partnerships. On January 28, ServiceNow announced two strategic partnerships. The first is with Fiserv, under which Fiserv will expand its use of an AI-embedded ServiceNow Assist for financial services operations (FSO) and information technology service management (ITSM). The second is with Panasonic Avionics Corporation, wherein Panasonic will use ServiceNow’s AI-driven customer relationship management software.
In addition to organic growth, ServiceNow has two acquisitions in the pipeline, in addition to the Moveworks acquisition, which closed on December 15. The first is Armis, which will allow ServiceNow to expand its presence in the AI cybersecurity space. The second is Veza, which will enhance ServiceNow’s AI-driven workflow capabilities. Both deals are expected to close in the first half of 2026.
ServiceNow Inc. (NYSE:NOW) provides cloud-based and AI-embedded end-to-end workflow automation solutions for enterprises. The company is located in Santa Clara, California, and was founded in June 2004 by Frederic B. Luddy.
3. Samsara Inc. (NYSE:IOT)
Share Price: $25.42
52-Week Low: $23.38
Upside: 88.83%
Next Year’s EPS Growth: 17.97%
Number of Hedge Fund Holders: 42
Samsara Inc. (NYSE:IOT) is one of the 11 Best Beaten Down Growth Stocks to Buy Now.
Piper Sandler, on February 6, cut its target price on Samsara by 24.4% to $37 (from $49) but kept its Overweight call on the shares. The firm noted that while overall investor sentiment for software stocks was at an all-time low (“More frozen than Elsa’s castle” was the exact term the analyst used), it believes that IOT’s high upside, operational budget stickiness (which can serve as a moat against the impact of artificial intelligence on software companies), and de-risked FY2027 numbers (which would make growth in the mid-20s for the next year realistic) make Samsara a good investment at its current price. This view on IOT is in line with what other firms are saying about the company.
On the first point regarding Samsara’s ability to withstand the negative impact of artificial intelligence, BTIG, in a note dated December 17, said that IOT is operating in a “highly attractive end-market tethered to operational budgets,” making IOT’s relationship with its clients sticky. RBC Capital, on January 5, said that IOT is one of the few software companies well-positioned for enterprise AI adoption. As such, the company will likely benefit from the AI tailwinds in 2026.
On the second point regarding the de-risked FY2027 numbers, RBC Capital said that management’s guidance on Q4-2026 revenue is quite conservative given the strong beat in Q3-2026. For reference, Samsara’s management expects $421 million to $423 million for Q4-2026 (vs. consensus of $419.2 million).
Samsara Inc. (NYSE:IOT) develops cloud-based sensor systems, which combine plug-and-play sensors, internet connectivity, and cloud-based software. The company is based in San Francisco, California, and was started in 2015 by John Bicket and Sanjit Biswas.
2. Zscaler Inc. (NASDAQ:ZS)
Share Price: $167.33
52-Week Low: $162.94
Upside: 91.24%
Next Year’s EPS Growth: 17.35%
Number of Hedge Fund Holders: 50
Zscaler Inc. (NASDAQ:ZS) is one of the 11 Best Beaten Down Growth Stocks to Buy Now.
On February 5, Zscaler announced that it had acquired SquareX. This acquisition would enable the company to expand its ZeroTrust capabilities to the browser by leveraging SquareX’s pioneering Browser Detection and Response (BDR) solution. The exact terms of this transaction have not yet been disclosed to the public, with more details likely to come during the company’s Q2-2026 earnings call on February 26.
As for the potential impact of this deal, Vivek Ramachandran, founder of SquareX, said:
”By integrating with Zscaler, we will enable organizations to secure SaaS and private applications across any device – managed or BYOD – without compromising productivity. This approach allows IT leaders to replace expensive, insecure legacy access tools with precise Zero Trust policies that protect data and AI interactions based on an organization’s specific risk profile.”
A day after this deal was announced, Zscaler’s stock fell slightly by 1.2% to $167.33 (from $169.39). Year-to-date, the stock has fallen 18.9% as investor sentiment on software companies sinks due to the “AI is the death of software” narrative. Despite this fall, analysts still have a bullish view on Zscaler. This conviction is evident in the median analyst target price of $320.00, according to CNN data, implying a potential upside of 91.24%.
Zscaler Inc. (NASDAQ:ZS) is a provider of cloud-based internet security platforms. The company is located in San Jose, California, and was founded in September 2007 by Singh Chaudhry and K. Kailash.
1. ServiceTitan Inc. (NASDAQ:TTAN)
Share Price: $63.74
52-Week Low: $60.57
Upside: 104.74%
Next Year’s EPS Growth: 18.12%
Number of Hedge Fund Holders: 48
ServiceTitan Inc. (NASDAQ:TTAN) is one of the 11 Best Beaten Down Growth Stocks to Buy Now.
On February 3, Piper Sandler trimmed its target price on ServiceTitan by 14.3% to $120 (from $140) but retained its Overweight call on the stock. In addition, the firm said that ServiceTitan is one of its top picks in the software industry, next to Microsoft (NASDAQ:MSFT).
Similar to Piper Sandler’s comment on Vertex Inc. (NASDAQ:VERX), concerns about seat compression due to the impact of artificial intelligence, specifically vibe coding, were key reasons for the target price cut on TTAN. Piper Sandler emphasized that its decision does not reflect the firm’s conviction regarding TTAN’s Q4-2026 earnings (which will be released on March 12).
For context, Anthropic’s launch of open-source plugins for Claude Cowork on January 30 spooked investors who fear that most software can eventually be replaced with these self-serve open-source generative AI tools. As such, this release from Anthropic erased $285 billion in market capitalization for software, financial services, and asset management stocks, according to Bloomberg.
ServiceTitan’s stock price fell 21.8% to $61.29 (from $78.34) because of this news, before rebounding slightly to $63.74. Despite the sell-off, most analysts are still convinced that TITAN is a good investment. According to CNN, the median target price is $130.50, implying an upside of 104.74%.
ServiceTitan Inc. (NASDAQ:TTAN) is a customer relationship management (CRM) software provider, catering specifically to trade persons and service contractors. The company is located in Glendale, California, and was founded in June 2008 by Ara Mahdessian and Vahe Kuzoyan.
While we acknowledge the potential of TTAN as an investment, 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 TTAN and that has 100x upside potential, check out our report about this cheapest AI stock.
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