Top 3 Best SaaS Stocks to Watch

Brandie E Blackler
10 Min read

The tech industry has seen plenty of changes over the past few decades. One of the biggest shifts in the landscape has been the rise of software as a service companies (or SaaS for short). 

As the name itself suggests, SaaS companies offer software-based services that are available via the Internet. In other words, the user does not have to acquire a physical copy of that software and does not need to install it on their computer. 

SaaS stocks could be an option if you are looking to expand your portfolio. In this article, we will go through the basics of SaaS stocks, their pros and cons, as well as how to invest in them. 

If this sounds interesting, let’s get started. 

Best SaaS Stocks: Introduction 

The roots of software as a service date back to the 1990s. Back then, some companies operated on an ASP model - application service providers.

These companies, however, operated by hosting third-party applications, and the service was usually provided to businesses, rather than individuals. 

Over time, with the advancement in cloud computing technology, the ASP model slowly transitioned to SaaS. Instead of hosting third-party applications, SaaS companies offered their product instead. 

The SaaS model has since expanded considerably, moving from being almost exclusively business-oriented to becoming available for the general public.

SaaS ranges from office suite applications, like Microsoft 365 and Google Workspace, to financial services, and even entertainment - Netflix, Hulu, Prime Video, and other similar applications. 

In the SaaS model, users usually pay a subscription to access the software, which is hosted on a server owned by the provider. This way, the whole process is network-based, meaning that there is no need to install the software on the user’s computer. 

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What are SaaS Stocks? 

If one finds it interesting to add SaaS company stocks to a given investment portfolio, then it is important to better understand the SaaS vertical.

Plenty of tech industry giants offer SaaS options, which means that you will have plenty of alternatives to choose from. 

With the expansion of cloud computing, the SaaS model could be in a reasonable position right now.

Users have been slowly migrating towards cloud-based services, which usually offer several advantages compared to the traditional software distribution model: 

  • There is no need to own a physical version of the software. 
  • Likewise, there is no need to install the software, which in turn frees up space in the computer’s memory. 
  • The software is readily available, only a few clicks away. 
  • Updates are quick and done automatically, and do not require the user to download and manually patch the software. 
  • Users do not need to buy new software versions. 
  • Companies do not need to invest in massive servers to store their database. Instead, they can simply pay a subscription fee, and also save maintenance costs. 

On the other hand, SaaS does create a few issues. Just like any other cloud-based service, SaaS are vulnerable to data breaches, so privacy is a concern. 

Best SaaS Stocks: Advantages and Disadvantages 

All investments have their own sets of pros and cons. SaaS stocks are no exception. We will now take a look at some of the advantages and disadvantages of investing in SaaS stocks. 

Best SaaS Stocks: Advantages 

  • The SaaS market could likely continue to expand, as customers continue to migrate to cloud-based services for their ease of use. Artificial Intelligence is also another positive, as SaaS companies have ramped up AI integration. 
  • The SaaS market is quite diverse, ranging from everyday digital services to hosting databases for major companies. 
  • Growth rates for the Saas industry have outpaced the rest of the market over the past few years. 

Best SaaS Stocks: Disadvantages 

  • The SaaS market is a highly competitive one, which can make it difficult for new companies. As a result, investors may look for smaller returns by investing in the bigger, better-established names. 
  • Data breaches and privacy are an inherent problem for cloud-based services. A major security failure is always a looming threat. 
  • Despite the major growth, SaaS could eventually platoon at some point. And with quite a few discretionary services among them, these companies could see a drop in prices during a recession. 

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Top 3 Best SaaS Stocks to Watch 

If you are considering investing in SaaS stocks, then there are a few names that stand out.

We will now look at the best SaaS stocks to watch available, as well as their pros and cons. 

1. Adobe Systems Inc. (ADBE) 

One of the biggest names in the American software development market, Adobe has naturally branched off to SaaS as well. Some of the products in the company’s portfolio include Adobe Experience Cloud (analytics and marketing tools) and Adobe Creative Cloud (video and image editing, plus web development tools). 

Advantage of Adobe stocks: 

  • Adobe is a popular option among return investors, as the tech giant provides consistent returns. 

Disadvantage of Adobe stocks: 

  • On the other hand, Adobe stocks are available at a premium price, and that can drive some smaller investors away. 

At Admirals, you can trade the ADBE CFD in both price directions (Buy/Sell), or invest in ADBE shares directly.

2. Inc. (CRM) 

The San Francisco-based company is one of the leading service providers in the customer relationship management segment. Salesforce offers software for sales management, customer service, analytics, and marketing, among others. 

Advantage of Salesforce stocks: 

  • Salesforce has experienced impressive growth in recent years, and the company doesn’t shy away from ramping up investments. Advanced AI integration is one of Salesforce's major advantages. 

Disadvantage of Salesforce stocks: 

  • Despite its position as one of the leading companies in the customer relationship segment, Salesforce isn’t quite as lucrative as the biggest names in the SaaS market as a whole. 

You have the option to trade CRM CFDs in both price directions or invest in CRM shares directly with Admirals.

3. ServiceNow Inc. (NOW) 

ServiceNow is well-known for its integration tools, which have made it a favourite in the SaaS market. ServiceNow’s products have been adopted by some of the biggest companies in the world. 

Advantage of ServiceNow stocks: 

  • AI is one of the main reasons why ServiceNow has set itself apart. The company started early with its AI investments. ServiceNow’s automated workflow solutions have set new standards. 

Disadvantage of ServiceNow stocks: 

  • ServiceNow shares are extremely volatile. While it’s been on the rise recently, the company has also experienced quite a few massive drops in prices, so take the risk and reward into account. 

You have the option to trade NOW CFDs in both price directions or invest in NOW shares directly at Admirals.

How to Buy SaaS Stocks 

The best way to invest in SaaS stocks is through a reliable and regulated broker, like Admirals. This makes the process easier, faster, and also safer. 

At Admirals, you can start with a demo account, which doesn’t use real assets. This way, you can trade risk-free to learn the ropes, without having to worry about losses while you come up with your strategy. After that, you can deposit and sign up for a live account to start trading with your real assets. 

Admirals users have access to the MetaTrader 5 platform, the market-leading multi-asset trading platform according to traders and investors from around the globe. 

With MT5, you will have access to plenty of tools and features, including: 

  • Automated trading bots. 
  • Educational tools. 
  • Personalized charts. 
  • Free market news. 

If you would like to start analysing the best SaaS stocks to watch, amongst other financial assets, you can download the leading MetaTrader 5 tool for free. Click the banner below to get started:

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Best SaaS Stocks to Watch: Conclusion 

Cloud computing has been on the rise for well over a decade, and the software as a service (SaaS) market has greatly benefited from this shift.

SaaS stocks are an interesting option if you are looking for alternatives to diversify your portfolio, as you would also benefit from the boom in cloud technology. 

While this market is set to continue expanding, keep in mind that SaaS stocks also come with a few risks. The most notable one is the ever-present risk of data breaches, which could naturally damage the stocks’ value.

SaaS is also a very competitive segment, so keep that in mind. Investing in new companies with high growth potential can be tempting, but the competitive nature of the market makes these prospects extremely tricky to predict.

There is always an element of risk in all trading and investing activity,

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Is SaaS a good investment?

Whether SaaS is a good investment or not is always subjective, however generally speaking with current global trends in technology and finance, SaaS stocks could be a viable and lucrative investment, given thorough analysis.



Why is SaaS attractive to investors?

The main reason why SaaS stocks are attractive to investors is because SaaS companies rely on a subscription-based business model, which in turn translates to a predictable or steady income streams.



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1. This is a marketing communication. The content is published for informative purposes only and is in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.

2. Any investment decision is made by each client alone whereas Admirals shall not be responsible for any loss or damage arising from any such decision, whether or not based on the content.

3. With view to protecting the interests of our clients and the objectivity of the Analysis, Admirals has established relevant internal procedures for prevention and management of conflicts of interest.

4. The Analysis is prepared by an independent analyst (hereinafter “Author”) based on Brandie E Blackler, Financial Analyst, personal estimations.

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7. Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, please ensure that you fully understand the risks involved. 

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