Buy These 2 Beaten-Down Growth Stocks

You wouldn't know it from looking at market indexes like the S&P 500 and the Nasdaq Composite, which are trading near all-time highs, but the recent sell-off in software-as-a-service stocks has been absolutely brutal. This group has been getting punished as investors debate whether their shares are really worth their premium valuations in an era when AI (artificial intelligence) is proving a disruptive force.

To be fair, the valuations of many software-as-a-service stocks were extremely frothy headed into 2026, so a pullback in their stock prices makes sense. But do they really deserve to take such a massive beating? Even more, are there any software-as-a-service stocks that have been oversold, creating a buying opportunity for investors?

After sifting through these beaten-down names, I've identified two that look particularly attractive today. Not only do their stocks look cheap relative to their underlying fundamentals, but a case can be made that AI is actually improving these companies' growth prospects, not hurting them.

The two software-as-a-service growth stocks that look exceptionally attractive today are Adobe (NASDAQ: ADBE) and Intuit (NASDAQ: INTU). The two companies' stocks have been absolutely pummeled, falling 26% and 39% year to date, respectively.

Here's why this may be a good buy-the-dip moment for both stocks.

Image source: Getty Images.

Adobe: AI-powered tools are driving strong demand

With a price-to-earnings ratio of 16 and a forward price-to-earnings ratio (a stock's price as a multiple of analysts' consensus forecast for earnings per share over the next 12 months) of 11, the creativity software company's stock has simply become too cheap to ignore.

The company recently closed out its fourth quarter with 10% year-over-year revenue growth, with Adobe CEO Shantanu Narayen citing the company's "growing importance in the global AI ecosystem and the rapid adoption of our AI-driven tools," as a key driver for its recent business momentum. "By advancing our innovative generative and agentic platforms and expanding our customer base," he added in the company's earnings release, "we are excited to target double-digit [annual recurring revenue] growth in [fiscal] 2026."

Specifically, management guided for total Adobe annual recurring revenue to increase 10.2% year over year in fiscal 2026. Additionally, the midpoint of the company's earnings-per-share guidance range called for year-over-year growth of 7.8%.

Intuit: Agentic services are enhancing its offerings

Intuit commands a higher valuation multiple, with a price-to-earnings ratio of 28 and a forward price-to-earnings ratio of 18 as of this writing, but the tech company arguably deserves this higher multiple, given its stronger top and bottom-line momentum recently. Intuit's revenue growth in the company's most recent quarter soared 18% year over year. Even more, this was fueled by broad-based strength across its business. Some key highlights include 27% year-over-year growth in Credit Karma revenue, 25% growth in QuickBooks online accounting revenue, and 17% growth in online services revenue.

The company is particularly excited about growth opportunities in AI. Intuit is using AI agents to help humans automate tasks and workflows. While it only rolled out AI agents last summer, management said in its most recent earnings call that they've already seen strong momentum with these features.

"We're continuing to see momentum with our virtual team of AI agents, with 2.8 million customers leveraging these agents to do the work for them," said Intuit CEO Sasan Goodarzi in the company's fiscal first-quarter earnings call.

Already one quarter into its fiscal year, Intuit expects its momentum to continue. The company guided for full-year revenue to increase 12% to 13% year over year, with its earnings per share rising 13% to 15%.

Of course, both Adobe and Intuit face risks. AI is, of course, one of them. While AI currently looks like more of a tailwind than a headwind for both companies, it could evolve into a threat if it helps other businesses quickly develop competing products or makes it easier for users to create do-it-yourself solutions. Overall, however, I believe this sell-off is a good opportunity for investors to buy shares while others are fearful. Of course, given both companies' heavy reliance on rapidly changing technology, investors should consider these high-risk investments and keep any positions in the stocks small.

Daniel Sparks and his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Adobe and Intuit. The Motley Fool recommends the following options: long January 2028 $330 calls on Adobe and short January 2028 $340 calls on Adobe. The Motley Fool has a disclosure policy.