We recently published a list of 10 Best SaaS Stocks to Invest In. In this article, we are going to take a look at where DocuSign, Inc. (NASDAQ:DOCU) stands against other best SaaS stocks to invest in.
Mobile devices are now running more sophisticated and complicated software applications, which supports improving demand for SaaS solutions that can be accessed only with the help of an internet connection. As of now, continuous innovation has been helping businesses in running their operations globally. It continues to improve scalability and flexibility in data storage. Experts opine that the SaaS domain has been aiding in major decision-making and strategy-building as dynamic technologies such as AI and ML have been intersecting with it.
SaaS Growth Drivers for 2025
As per Fortune Business Insights, the global Software as a Service (SaaS) market size was pegged at US$273.55 billion in 2023 and is expected to grow from US$317.55 billion in 2024 to US$1,228.87 billion by 2032. The US SaaS market is expected to grow significantly, reaching an estimated value of US$236.69 billion by 2032, courtesy of the adoption of public and hybrid cloud-based tools by enterprises. Overall, the SaaS market growth is expected to be fueled by numerous factors such as an increase in the adoption of public & hybrid cloud-based solutions, integration with other tools, and centralized data-driven analytics.
As per Straits Research, increased demand for smart devices and their applications has been aiding the broader market. Notably, end-user demand for intelligent devices is supported by the expansion of email, instant messaging applications, and video calls. This is expected to contribute to the expansion of the SaaS market. Also, higher spending on cloud-based solutions by end-use businesses can accelerate the expansion of the broader SaaS industry over the upcoming years.
READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.
Key Trends Likely to Help SaaS in 2025
With continuous advancements in technology, changing market demands, and increased dependence on cloud-based solutions, SaaS trends have been redefining the future of digital transformation for companies. Fortune Business Insights believes integrating AI and ML with SaaS Solutions will fuel broad-based market growth. This means that the adoption of AI/ML is expected to change the SaaS industry in many ways, mainly by improving the critical features of several software solutions. Notably, customizing & automating solutions, augmenting security, and improving human capacity are possible by incorporating SaaS solutions and AI/ML abilities.
Furthermore, SaaS has been continuously evolving and transforming services among cloud computing technologies. As per Fortune Business Insights, the key trending factors of SaaS are expected to continue to evolve and outline the future of cloud technologies, innovation, efficiency, and business values.
Our Methodology
To list the 10 Best SaaS Stocks to Invest In, we used a screener and scanned through several online rankings. Next, we chose the companies that were popular among hedge funds. Finally, the companies were arranged in ascending order of their hedge fund sentiments, as of Q3 2024.
At Insider Monkey we are obsessed with 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A software engineer in front of a computer screen, typing code to build the company’s electronic signature software.
DocuSign, Inc. (NASDAQ:DOCU)
Number of Hedge Fund Holders: 42
DocuSign, Inc. (NASDAQ:DOCU) is considered a SaaS business due to its ability to provide a cloud-based software platform enabling users to electronically sign documents, manage contracts, and automate workflows. JMP Securities reissued a “Market outperform” rating on the company’s shares, issuing a price target of $124.00 on 7th January. Deloitte believes poor agreement management practices and systems cost companies ~$2 trillion in annual global economic value as value destruction happens unevenly across functions.
DocuSign, Inc. (NASDAQ:DOCU)’s newly launched Al-powered Intelligent Agreement Management (IAM) platform can help such businesses to limit their losses. How? IAM streamlines the entire lifecycle of agreements- right from creation to execution, and beyond. Besides improving compliance and security, DocuSign, Inc. (NASDAQ:DOCU)’s IAM enhances visibility and tracking, making it easier to manage multiple agreements simultaneously. The company’s Al platform presents numerous opportunities for improving contract management and analytics capabilities.
With more organizations embracing cloud computing, the demand for cloud-based services like DocuSign, Inc. (NASDAQ:DOCU)’s electronic signature and agreement management platform increases. Furthermore, elevated demand for remote and hybrid work solutions can also act as a near-term growth catalyst. As companies focus on securing digital workflows, their integrated approach to e-signatures and identity management is expected to fuel significant upsell opportunities.
Overall, DOCU ranks 10th on our list of best SaaS stocks to invest in. While we acknowledge the potential of DOCU as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued AI stock that is more promising than DOCU 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 Complete List of 59 AI Companies Under $2 Billion in Market Cap
Disclosure: None. This article is originally published at Insider Monkey.
