SaaSpocalypse 2.0: 3 SaaS Stocks to Buy on the Latest Sell-Off

After rallying from their lows this spring, software-as-a-service (SaaS) stocks once again have sold off in the latest tech pullback. With companies in the sector continuing to demonstrate that they are not getting disrupted by artificial intelligence (AI) and that it is likely more of a growth driver, now could be a good time to buy some top SaaS names on this dip.

Let's look at three SaaS stocks to consider buying right now.

1. Palantir Technologies

After years of outperformance, Palantir Technologies (NASDAQ: PLTR) stock has struggled this year, losing a quarter of its value, and it has once again been caught in the tech downdraft.

Despite its stock performance, its operational performance has been nothing short of spectacular. Palantir's AI platform (AIP) has become like an AI operating system that makes AI more useful in real-world situations. The platform's strength lies in its ability to gather data from disparate sources and structure it into an ontology, linking it to physical assets and actual processes. This significantly reduces AI hallucinations and should become even more important as agentic AI emerges.

Palantir has been seeing breakneck growth, with revenue accelerating for 11 straight quarters. Last quarter, its revenue surged 85%, once again led by U.S. commercial customer growth of 133%. The company is both rapidly adding new customers and seeing existing customers aggressively expand, with its net revenue retention up an incredible 150% over the past 12 months.

While the stock is still not cheap, the company has the potential to become one of the most important AI companies in the world.

2. Microsoft

Not even Microsoft (NASDAQ: MSFT) has been spared from the SaaS sell-off this year, with its stock down more than 15% in 2026. Like Palantir, it has also been performing well operationally.

Growth has been led by its cloud computing unit, Azure, which saw revenue grow 40% last quarter. It was Azure's 11th straight quarter of 30% or more revenue growth. This strong growth should continue well into the future, with $627 billion in future cloud computing commitments in its backlog.

Given how ingrained Microsoft's solutions are in enterprises, the risk of AI disruption looks small, and instead, it looks like the company will be a key AI facilitator. In fact, the company's enterprise software business is also performing well, with revenue from Microsoft 365 commercial revenue climbing 19% last quarter. The growth is being driven by increased adoption of Microsoft 365 Copilot, with paid users surging 250% to 20 million.

With its stock now trading at a forward price-to-earnings (P/E) ratio of under 21 based on fiscal 2027 analyst estimates (ending June 2027), it looks cheap given its growth and opportunities ahead. Microsoft also owns 27% of OpenAI.

Image source: Getty Images.

3. ServiceNow

With its platform acting as the central nervous system on which IT departments run their entire software stacks, ServiceNow (NYSE: NOW) is not only very unlikely to be disrupted by AI, but also to be a big beneficiary. The company's configuration management database (CMDB) is deeply embedded in its customers' workflow and data and is an irreplaceable system of record. This makes it an ideal platform to launch an agentic AI orchestration platform, which the company recently introduced.

ServiceNow has been seeing solid growth, with subscription revenue climbing 22% last quarter. Now Assist, its suite of AI solutions, has been seeing strong growth, with revenue up nearly 70% in Q1. However, it is the company's new agentic AI orchestration solution, AI Control Tower, that appears to have the most potential, given that AI agents are still in their early innings and organizations will need a platform to manage them.

Trading at a forward P/E of less than 22 times 2027 estimates, the stock is an attractive pick-up at these levels.

Geoffrey Seiler has positions in ServiceNow. The Motley Fool has positions in and recommends Microsoft, Palantir Technologies, and ServiceNow. The Motley Fool has a disclosure policy.