Software-as-a-Service (SaaS) is a steadily growing segment of cloud computing that allows users to access software applications over the internet without the need for local installation. Instead of purchasing expensive software licenses, businesses and individuals can subscribe to these applications on a pay-as-you-go basis. SaaS solutions offer flexibility, cost savings, and scalability while eliminating the need for companies to manage infrastructure, security, and software updates. With businesses increasingly relying on cloud-based solutions, the SaaS market is poised for substantial growth in the coming years.
According to a September report by Kash Rangan, Head of US Software Research at Goldman Sachs Research, cloud computing sales are projected to reach $2 trillion by 2030. The total addressable market for cloud services is expected to expand at a compound annual growth rate (CAGR) of 22% between 2024 and 2030. A significant driver of this growth is generative AI, which could contribute between $200 billion and $300 billion in cloud spending as investment spreads beyond major tech firms and AI model providers.
The Head of Research further explained that cloud computing growth will begin with the infrastructure layer, which will then drive expansion in platforms and applications. He estimates that Infrastructure-as-a-Service (IaaS) will represent $580 billion, or 29% of the cloud market by 2030. Meanwhile, Platform-as-a-Service (PaaS) is projected to grow to $600 billion (30% of the market), and SaaS is expected to contribute the largest share at $780 billion, accounting for 41% of total cloud spending.
Their research also suggests that the initial beneficiaries of cloud adoption will be infrastructure providers, as seen with the AI revenue surge among hyperscalers. This will be followed by growth in the platform and application layers. There is a natural interdependence between PaaS and SaaS—platform solutions are essential for enabling next-generation applications, while the true value of the platform layer cannot be realized without compelling applications driving demand. The software sector, which has experienced three years of slowing growth, now has the potential to re-accelerate as cloud adoption and AI-driven innovations continue to evolve.
For investors looking to capitalize on this trend, SaaS stocks represent a strong long-term opportunity. As cloud adoption continues to expand, leading SaaS companies are well-positioned to benefit from rising enterprise demand, AI integration, and increased digital transformation across industries. With SaaS projected to be the dominant cloud computing segment by 2030, investors may find significant value in high-growth SaaS stocks that are shaping the future of software solutions.
With those insights in mind, let’s explore our selection of 10 best SaaS stocks to buy according to billionaires.
A close-up of a server running a cloud-native platform, symbolizing the power of the software-as-a-service (SaaS) business area.
Our Methodology
To identify the 10 best SaaS stocks to buy according to billionaires, we first compiled a list of SaaS-focused stocks by reviewing ETFs and financial media reports. We specifically selected companies with significant exposure to the SaaS business, excluding enterprise and application software firms with relatively low SaaS exposure (which are covered in a separate article). From this refined list, we analysed Insider Monkey’s database of billionaire holdings to determine which SaaS stocks were most favoured by billionaire investors. We then ranked the top 10 stocks in ascending order based on the number of billionaire investors holding positions in each company as of Q4 2024. Additionally, we also provide data to assess hedge fund sentiment surrounding these stocks, utilizing data from Insider Monkey’s Q4 2024 hedge fund database to provide deeper insights into institutional investor trends.
Note: All pricing data is as of market close on March 15.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10 Best SaaS Stocks to Buy According to Billionaires
10. Dropbox Inc. (NASDAQ:DBX)
Number of Billionaire Investors: 13
Billionaire Holdings: $548 Million
Number of Hedge Fund Holders: 36
Dropbox Inc. (NASDAQ:DBX) is a cloud-based platform for file storage and collaboration, allowing users to store, sync, and share files across multiple devices. It offers productivity solutions for individuals and businesses, including Dropbox Paper, HelloSign, and integrations with third-party applications.
In Q4 2024, Dropbox Inc. (NASDAQ:DBX) reported revenue of $643.6 million, reflecting a 1.4% year-over-year (YoY) increase. Adjusted gross margin improved to 83.2%, up 80 basis points YoY, while adjusted operating margin expanded by 470 basis points to 36.9%. As a result, adjusted EPS surged 46% to $0.73. Dropbox Inc. (NASDAQ:DBX) is restructuring its core operations and optimizing costs, driving earnings growth. Additionally, it is scaling and promoting its AI-powered product, Dash for Business, to support revenue expansion. The company generated over $210 million in free cash flow during the quarter, marking an 11% YoY increase. However, a projected decline of approximately 300,000 paid users in 2025 has led analysts to take a cautious stance on near-term growth.
Dropbox Inc. (NASDAQ:DBX) currently has a consensus 1-year median price target of $29, suggesting a 10% upside potential. Following its earnings report, RBC Capital analyst Rishi Jaluria reaffirmed a Buy rating, assigning a consensus-high price target of $32.
9. HubSpot Inc. (NYSE:HUBS)
Number of Billionaire Investors: 14
Billionaire Holdings: $981 Million
Number of Hedge Fund Holders: 73
HubSpot Inc. (NYSE:HUBS) is a leading provider of cloud-based customer relationship management (CRM) software designed for marketing, sales, customer service, and content management. Its platform helps businesses attract, engage, and retain customers through an integrated suite of tools, including HubSpot CRM, Marketing Hub, Sales Hub, and Service Hub.
HubSpot Inc. (NYSE:HUBS) had a good performance in Q4 2024. It added over 9,800 net customers in the quarter which took its total customer base to 248,000 globally. FY 2024 revenue was up a strong 21% which the company attributed to growing multi-hub adoption, strong upmarket and downmarket success, improvements in retention and product innovation.
On March 12, a Barclays analyst upgraded the stock from Equal Weight to Overweight with a price target of $815. The analyst expects HubSpot Inc. (NYSE:HUBS) to benefit in the short term from higher prices and an increase in core customers. The analyst also believes AI will help the company make more money, as its AI-powered features encourage customers to spend more. Overall, he believes that AI will drive stronger long-term growth for the company.
8. Workday Inc. (NASDAQ:WDAY)
Number of Billionaire Investors: 15
Billionaire Holdings: $1.7 Billion
Number of Hedge Fund Holders: 89
Workday Inc. (NASDAQ:WDAY) is a provider of enterprise cloud solutions for finance and human resources. Its offerings include a comprehensive range of financial management, human capital management (HCM), and analytics tools, all aimed at helping organizations streamline their operations.
Workday Inc. (NASDAQ:WDAY) has demonstrated remarkable growth, with its revenue surging from $1.6 billion in 2016 to $8.4 billion in 2024, reflecting an annual growth rate of 23%. The company has identified a market opportunity worth $160 billion and projects an annual subscription revenue growth of 15% through 2027, targeting a 30% operating margin as enterprises continue embracing digital transformation.
On March 17, Scotiabank analyst Allan Verkhovski lowered the price target for Workday Inc. (NASDAQ:WDAY) from $355 to $305, while maintaining an Outperform rating. He cited concerns about weakening demand and elevated risks linked to a potential recession but expressed preference for leading software and services firms with strong free cash flow and AI-driven opportunities. Interestingly, on February 27, Verkhovski had raised the price target to $355, following robust quarterly results. Around the same time, BMO Capital analyst Daniel Jester also increased his price target for the stock from $300 to $314, driven by strong Q4 performance, and reiterated an Outperform rating. Jester further emphasized Workday’s AI-driven initiatives that boost growth and operational efficiency in critical areas. He believes the company’s multiple value creation opportunities remain underappreciated by investors.
7. Shopify Inc. (NYSE:SHOP)
Number of Billionaire Investors: 16
Billionaire Holdings: $1.5 Billion
Number of Hedge Fund Holders: 64
Shopify Inc. (NYSE:SHOP) is a Canadian e-commerce company that provides a cloud-based platform for businesses to create and manage online stores. The platform offers tools for payments, marketing, shipping, and customer engagement, making it a one-stop solution for merchants.
While analysts viewed Shopify Inc. (NYSE:SHOP) Q4 2024 results largely positively, some analysts remained on the sideline over valuation. Truist Securities analyst Terry Tillman increased his price target on the company to $120 from $110 but maintained a Hold rating. He believes that the company reported a strong growth at scale in Q4 with upside to estimates across gross merchandise volume, revenue, profits, and cash flow. However, the analyst adds that while he is incrementally positive on the business fundamentals, he remains on hold due to valuation.
On the other hand, on March 6, Wells Fargo analyst Andrew Bauch reaffirmed a Buy rating on Shopify Inc. (NYSE:SHOP) with a $135 price target. He highlighted strong momentum in enterprise, offline, and B2B sectors, as well as the company’s efforts to address tariff challenges by boosting local commerce. The analyst was bullish on the company’s AI-driven efficiencies, stable headcount, and disciplined investments, and believed that the company is well-positioned for growth while maintaining strong margins.
6. Atlassian Corp. (NASDAQ:TEAM)
Number of Billionaire Investors: 17
Billionaire Holdings: $2.9 Billion
Number of Hedge Fund Holders: 75
Atlassian Corp. (NASDAQ:TEAM) is an Australian software company that designs and develops enterprise software platform for project management, collaboration, issue tracking, integration, deployment, and support services. Its flagship products, Jira and Confluence, are widely used for project management and team collaboration. The company also offers Trello, Bitbucket, and other tools that empower teams to work efficiently.
On January 31, a BMO Capital analyst raised price target on Atlassian Corp. (NASDAQ:TEAM) from $292 to $360 while maintaining an Outperform rating. The analyst believes the company can sustain 20% growth, especially after a tough March quarter. The strong December quarter results reinforced confidence to this outlook, supporting the analyst’s positive stance on the stock. Similarly, on February 2, Barclays analyst Ryan MacWilliams raised Atlassian Corp. (NASDAQ:TEAM)’s price target from $275 to $350 and maintained an Overweight rating. He cited strong quarterly results, driven by enterprise growth and stable small business performance. MacWilliams expects investor confidence to improve as management remains optimistic about customer spending and increasing focus on cloud migration.
5. Datadog Inc. (NASDAQ:DDOG)
Number of Billionaire Investors: 17
Billionaire Holdings: $766 Million
Number of Hedge Fund Holders: 83
Datadog Inc. (NASDAQ:DDOG) is a cloud-native monitoring and security platform that provides real-time observability for IT infrastructure, applications, and security environments. The company serves enterprises by offering comprehensive analytics across logs, metrics, traces, and network performance, enabling DevOps and IT teams to optimize operations and enhance cybersecurity.
In a report on March 4, Needham analyst Mike Cikos reaffirmed a Buy rating on Datadog Inc. (NASDAQ:DDOG) with a $160 price target, citing strong business momentum. The analyst highlighted that partner discussions indicate solid growth despite concerns about its OpenAI relationship, driven by industry mergers and customer focus on operational efficiency. The company’s new offerings, including LLM Observability, are expanding its market presence, while investments in security solutions position it well for industry trends. The analyst believed that these factors collectively create a strong growth environment, reinforcing his confidence in the company’s long-term potential and thus supporting the Buy rating.
4. Twilio Inc. (NYSE:TWLO)
Number of Billionaire Investors: 17
Billionaire Holdings: $1.1 Billion
Number of Hedge Fund Holders: 74
Twilio Inc. (NYSE:TWLO) is a customer engagement platform that combines cloud-based communications tools for e-mail, messaging, voice, and video along with contextual customer data and AI to deliver personalized experiences at scale.
Twilio Inc. (NYSE:TWLO) made strong progress on cost front as it reported first ever quarter of GAAP operating profitability. Reported operating profit for Q4 2024 came in at $13.7 million, which was a substantial improvement from GAAP loss from operations of $361.7 million in Q4 2023. Adjusted operating profit, however, was $197 million, ahead of $173 million in prior year quarter. Adjusted EPS for the quarter was also strong at $1.0, versus $0.86 in Q4 2023.
On February 25, Tigress Financial analyst Ivan Feinseth reiterated a Buy rating on Twilio Inc. (NYSE:TWLO) with a $170 price target, citing its strong market position. The company’s growth is driven by increasing customer engagement and its shift toward AI-powered services. The company’s cloud-based communication solutions boost revenue and cash flow, while strategic R&D, partnerships, and M&A efforts support long-term value. Additionally, Twilio’s share repurchase program highlights its financial strength and confidence in future growth, reinforcing the positive outlook.
3. Snowflake Inc. (NYSE:SNOW)
Number of Billionaire Investors: 18
Billionaire Holdings: $2.1 Billion
Number of Hedge Fund Holders: 85
Snowflake Inc. (NYSE:SNOW) is a cloud-based data platform that helps organizations efficiently store, analyze, and share data. Its Data Cloud enables businesses to consolidate data together in one secure and reliable place, driving innovation and valuable insights. The platform supports a variety of workloads, including data engineering, data science, and application development.
Snowflake Inc. (NYSE:SNOW) reported $986.8 million in total revenue, up 27% YoY, for Q4 2025 (FY ending in January). Product revenue, which make up majority of its revenue, rose 28% to $943.3 million, beating expectations of $916 million. The company now has 580 customers spending over $1 million annually, up from 542 last quarter. Looking ahead, product revenue is expected to grow 24% to $4.28 billion for FY 2026, slightly above estimates.
Robert W. Baird analyst William Power released a report on March 8, in which he maintained a Buy rating on Snowflake Inc. (NYSE:SNOW) with a $200 price target. The analyst cited its strong position in data storage and analytics as reason for his bullish stance. The company’s recent ‘Data for Breakfast’ event highlighted its AI-driven focus, particularly through its Cortex product for fast AI deployment. The analyst also believed that positive partner and customer feedback, along with over 400 new product capabilities in fiscal 2025, has strengthened Snowflake’s appeal among data engineers and scientists, supporting its growth potential.
2. ServiceNow Inc. (NYSE:NOW)
Number of Billionaire Investors: 19
Billionaire Holdings: $3.9 Billion
Number of Hedge Fund Holders: 110
ServiceNow Inc. (NYSE:NOW) provides a cloud-based platform for digital workflows, enabling organizations to automate and optimize their business processes. Its Now Platform offers solutions across IT service management, customer service, HR, and other areas.
ServiceNow Inc. (NYSE:NOW) continues to grow as a key player in enterprise software, driven by rising demand for workflow automation. On March 10, the company announced the $2.85 billion acquisition of AI firm Moveworks. Moveworks’ AI assistant and enterprise search technology will enhance ServiceNow’s AI and automation capabilities, unlocking new opportunities for growth.
Concerning the strategic benefits of the acquisition, an RBC Capital analyst viewed the acquisition of Moveworks as a positive step in advancing the company’s AI assistant capabilities rather than a weakness in its current offerings. While the analyst reiterated his Outperform rating, he lowered price target on the shares from $1,210 to $986 because of broader peer valuation multiple compression. Consensus 1-year median price target on ServiceNow Inc. (NYSE:NOW) currently stands at $1,200, suggesting a potential upside of over 40%.
1. Salesforce Inc. (NYSE:CRM)
Number of Billionaire Investors: 23
Billionaire Holdings: $9.0 Billion
Number of Hedge Fund Holders: 162
Salesforce Inc. (NYSE:CRM) is a global leader in customer relationship management (CRM) software. Its cloud-based platform provides solutions for sales, service, marketing, and commerce, enabling businesses to build stronger customer connections using the power of data and AI. Salesforce’s AI-driven tools, including Einstein, offer predictive insights and automation to boost productivity.
Similar to its February announcement of $500 million investment in Saudi Arabia, the company recently announced a $1 billion investment in Singapore over five years to drive digital transformation and promote Agentforce, aiming to address labour shortages in essential sectors. On the financial front, Salesforce Inc. (NYSE:CRM) continued to perform strongly as visible from its FY 2025 results. The company reported $37.9 billion in revenue (up 9% YoY), $63.4 billion in RPO (up 11% YoY), and a 31% rise in free cash flow to $12.4 billion. However, FY 2026 revenue guidance of $40.5-$40.9 billion fell modestly below the $41.5 billion consensus estimate.
The street remains largely positive on the stock. On March 7, Goldman Sachs analyst Kash Rangan reiterated his Buy rating on the company with a price target of $400, indicating a robust 43% upside potential. A day earlier, Barclays analyst Raimo Lenschow also reaffirmed a Buy rating on the shares with a price target of $425.
While we acknowledge the potential of CRM to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CRM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
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