Software isn’t Dead: 3 SaaS Stocks to Buy on the Dip


  • Invest in these three top SaaS stocks to buy, blending AI innovation with market dominance.
  • ServiceNow (NOW): With a remarkable 98% renewal rate and a customer base that includes 85% of the Fortune 500, ServiceNow’s platform is exceptionally sticky.
  • Salesforce (CRM): Salesforce’s integration of IBM’s sophisticated AI models into its Einstein 1 Platform propels its CRM capabilities.
  • Adobe (ADBE): Adobe’s pioneering use of AI algorithms like Content-Aware Fill and Adobe Sensei significantly amplifies its competitive advantage.
SaaS Stocks to Buy - Software isn’t Dead: 3 SaaS Stocks to Buy on the Dip

Source: TierneyMJ /

SaaS stocks to buy remain timeless picks for savvy investors. 

As the business world pivots from on-premise solutions to cloud-based services, the allure of SaaS stocks is undeniable. However, while the SaaS sector continues to grow at a heartening pace, it’s also fiercely competitive. Many have tried and failed to solidify their positioning in the software space, making it imperative to back the right companies to capitalize on the burgeoning trend. 

That said, the article discussed three of the top SaaS stocks to buy, exemplifying the sector’s potential for explosive revenue growth. These companies have successfully fortified their positions and enjoy a dominant market position. Moreover, with AI shaping the SaaS industry, now’s the perfect time to invest. These SaaS stocks, in particular, are leveraging AI, offering robust opportunities for forward-thinking investors. Additionally, with the current market volatility, it’s an opportune time to add these stocks to your portfolios. 

SaaS Stocks to Buy: ServiceNow (NOW)

ServiceNow office building in Silicon Valley;
Source: Sundry Photography /

ServiceNow (NYSE:NOW) is a premier choice among SaaS stocks, justifying its price tag with its stellar operating performance. Its platform enables companies to streamline workflows efficiently, enhance efficiency, and deliver unmatched customer experiences. Moreover, its loyal customer base positions ServiceNow as a key player in the SaaS industry, making it one of the best bets in today’s digital economy.

Its business has grown rapidly, boasting 28% revenue growth over the past five years and a 77% EBITDA over the same period. Also, its profitability profile is a visual treat, with a 5-year average gross margin and net income margin of 78% and 9.1%, respectively. 
Its robust cloud platform has proven incredibly sticky with its customer base, boasting an impressive 98% renewal rate. Moreover, it attracts the biggest companies in the world, with over 8,100 customers, including roughly 85% of the Fortune 500.

Also, its ability to attract big-ticket clients—2,000 customers with annual contracts exceeding $1 million—highlights its significant market impact.  Additionally, we’ve seen a pullback in its value recently, making it an opportune time to bet on it at current prices.

Salesforce (CRM)

lose up of Salesforce (CRM) logo displayed on one of their towers in downtown San Francisco. Salesforce layoffs
Source: Sundry Photography /

A lot of the recent turbulence in the software space is attributable to Salesforce (NYSE:CRM). Following a relatively tough quarter for CRM, the repercussions rippled through the industry, creating attractive entry points in several SaaS stocks. Despite the recent lull, there’s plenty to like about CRM as a long-term SaaS play, given its authoritative presence in the customer relationship management realm. 

Moreover, its massive bet on generative AI is another major growth catalyst for its business.  Its strategic deployment of its Data Cloud and Einstein 1 Platform is already bearing fruit in this regard.

Data Cloud has helped centralize customer data, streamlining the process for over 1,000 enterprises that have embraced the solution. Remarkably, 25% of the company’s high-value deals now include Data Cloud services. Also, the firm has integrated IBM’s (NYSE:IBM) sophisticated large language models into the Einstein 1 Platform, bolstering its analytical power. Hence, despite market skepticism, CRM’s forward-thinking approach strategically positions it for future growth, making it a wise bet for discerning investors.

Adobe (ADBE)

Adobe logo on the smartphone screen is placed on the Apple macbook keyboard on red desk background. ADBE stock.
Source: Tattoboo / Shutterstock

Over the years, Adobe (NASDAQ:ADBE) has seamlessly transitioned from its traditional software licensing model to a robust subscription-based SaaS platform. This major shift in its strategy has paid many dividends, adding to its colossal free cash flow base exceeding $6.6 billion.  Moreover, the move towards a subscription model has allowed the software giant to innovate and improve its offerings consistently. Also, with it commanding a massive 60% market share in the app development space, it creates a strong network effect that enhances its competitive edge.

Of late, we’ve seen Adobe looking to differentiate itself further from its competition through aggressive AI investments. Particularly, AI algorithms such as Content-Aware Fill and Adobe Sensei have enabled the firm to effectively scan truckloads of consumer user data to enhance service delivery and functionality. 

Financially, the firm remains as solid as ever, as evidenced by its recent quarterly performance. Its first-quarter (Q1) report showed adjusted earnings of $4.48 per share, besting market expectations by nine cents. Additionally, revenue surged 10.2% year-over-year (YOY) to $5.31 billion, beating forecasts by $20 million. As we advance, it expects annual revenues to fall in the $21.4 billion to $21.5 billion range, ahead of analyst expectations.

On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines

Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.

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