The software sector is currently navigating a challenging market landscape, but analysts are identifying promising investment opportunities in Software as a Service (SaaS) stocks. In a recent interview on December 10, 2025, Ashley MacNeill, a representative from Vista Equity, shared insights on the industry’s trajectory, highlighting the ongoing evolution of software as it adapts to artificial intelligence (AI).
According to MacNeill, the primary factor contributing to the software market’s struggles in 2025 is its gradual transition towards AI integration. She emphasized that the market is now entering a critical phase where software must fully embrace AI capabilities. As organizations seek to enhance their operations through AI, MacNeill anticipates the emergence of two distinct categories of software providers. The first includes companies like Salesforce, which focus on delivering direct AI solutions. The second encompasses firms that leverage AI to enhance their existing software offerings.
Investors looking to capitalize on this evolving landscape may find opportunities among the top-rated SaaS stocks. This article presents a curated list of the 11 best SaaS stocks to consider for investment as we approach 2026.
Methodology for Selection
To compile this list, we analyzed various exchange-traded funds (ETFs) such as the iShares Expanded Tech-Software Sector ETF and the Invesco AI ETF. By aggregating data on SaaS stocks, we focused on those expected to exhibit positive growth potential. The rankings reflect the number of hedge fund holders based on data from Insider Monkey’s Q3 2025 database, recorded on December 12, 2025.
Understanding why certain stocks attract hedge fund interest is crucial. Research indicates that mimicking the top stock selections of leading hedge funds can yield superior market performance. Our quarterly newsletter has demonstrated significant success, achieving a return of 427.7% since May 2014, outperforming its benchmark by 264 percentage points.
Highlighted SaaS Stocks
1. Workday, Inc. (NASDAQ:WDAY)
Analyst Upside Potential: 24.98%
Number of Hedge Fund Holders: 64
Following a decline of 7.85% in its share price after releasing its fiscal Q3 2026 earnings, Workday remains a notable player in the SaaS market. The company’s revenue growth of 12.59% year-over-year, reaching $2.43 billion, exceeded estimates by $14.54 million. Despite maintaining a cautiously optimistic outlook, analysts are awaiting a more favorable entry point.
2. Datadog, Inc. (NASDAQ:DDOG)
Analyst Upside Potential: 46.43%
Number of Hedge Fund Holders: 72
Despite a 21.49% drop in share price recently, Wall Street remains positive about Datadog’s future. The company recently expanded its partnership with AWS and launched new products, signaling continued innovation. Analysts maintain a positive outlook based on its strategic position in the observability market.
3. Palantir Technologies Inc. (NASDAQ:PLTR)
Analyst Upside Potential: 8.95%
Number of Hedge Fund Holders: 81
Palantir announced the renewal of a three-year contract with France’s domestic intelligence agency, enhancing its long-standing partnership. The company also secured a $446 million contract with the US Navy, bolstering its credibility in the defense sector. Analysts have reiterated strong buy ratings, reflecting confidence in the company’s growth.
4. Autodesk, Inc. (NASDAQ:ADSK)
Analyst Upside Potential: 24.62%
Number of Hedge Fund Holders: 83
Autodesk’s fiscal Q3 2025 results showcased an 18.03% year-over-year revenue growth, reaching $1.85 billion. The company has raised its full-year guidance, indicating a strong performance outlook. Analysts are optimistic about Autodesk’s sustainable growth trajectory, supported by disciplined execution.
5. Adobe Inc. (NASDAQ:ADBE)
Analyst Upside Potential: 21.28%
Number of Hedge Fund Holders: 88
Adobe’s fiscal Q4 results showed a 10.49% increase in quarterly revenue, driven by growth in its Digital Media segment. Despite some lowered price targets from analysts, the company’s clear AI implementation strategy is receiving positive attention.
6. Intuit Inc. (NASDAQ:INTU)
Analyst Upside Potential: 21.74%
Number of Hedge Fund Holders: 96
Intuit’s fiscal Q1 2026 results demonstrated robust growth, exceeding Wall Street expectations with a revenue increase of 18.34% year-over-year. Analysts maintain buy ratings based on the company’s solid market position, despite conservative full-year guidance.
7. Snowflake Inc. (NYSE:SNOW)
Analyst Upside Potential: 29.25%
Number of Hedge Fund Holders: 102
Snowflake’s share price has faced challenges, dropping over 17.7% recently. Nevertheless, analysts remain optimistic, highlighting strong revenue growth and a high net retention rate. The company’s focus on data engineering and AI workloads is seen as a positive indicator.
8. ServiceNow, Inc. (NYSE:NOW)
Analyst Upside Potential: 32.57%
Number of Hedge Fund Holders: 104
ServiceNow’s recent acquisition of Veza aims to enhance its cybersecurity offerings. Analysts have reaffirmed buy ratings, recognizing the potential benefits of integrating Veza’s technology with ServiceNow’s existing services.
9. Salesforce, Inc. (NYSE:CRM)
Analyst Upside Potential: 25.79%
Number of Hedge Fund Holders: 119
Salesforce’s expanded partnership with the US Department of Transportation aims to enhance operational efficiency through AI tools. Despite mixed results in its fiscal Q3 2026, analysts remain optimistic about the company’s growth prospects.
10. Oracle Corporation (NYSE:ORCL)
Analyst Upside Potential: 50.87%
Number of Hedge Fund Holders: 122
Oracle’s fiscal Q2 results reflected a 14.22% year-over-year revenue increase. Despite some concerns regarding capital expenditures, analysts continue to monitor the company’s growth potential closely.
11. Microsoft Corporation (NASDAQ:MSFT)
Analyst Upside Potential: 31.17%
Number of Hedge Fund Holders: 312
Microsoft is poised to benefit from OpenAI’s enterprise business expansion. The company also announced a significant investment of $17.5 billion in India, aimed at enhancing cloud and AI infrastructure.
As the SaaS landscape evolves, these companies represent key players worth considering for investment in the coming year. Investors should remain vigilant and informed as the market continues to adapt to technological advancements and changing economic conditions.
