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 Workday, Inc. (NASDAQ:WDAY) 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.
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).
Is Workday, Inc. (WDAY) the Best SaaS Stock to Invest In?
A group of finance professionals analyzing market trends on their computer screens.
Workday, Inc. (NASDAQ:WDAY) is a leading player in the SaaS industry as it offers cloud-based enterprise software for HR, financial management, and planning. Deutsche Bank analysts renewed confidence in the company’s stock as they upgraded it from “Hold” to a “Buy” rating, increasing the price target to $300 from $265. This upgrade demonstrates confidence in Workday, Inc. (NASDAQ:WDAY)’s solid fundamentals and potential for sustained revenue growth. In Q3 2025, the company’s total revenues came in at $2.160 billion, reflecting 15.8% growth YoY, with its subscription revenues coming at $1.959 billion, a 15.8% growth from the same period last year.
The company’s performance in Q3 2025 stemmed from the global momentum around its AI-driven innovations and the strength of its partner ecosystem. Deutsche Bank outlined 3 key drivers for Workday, Inc. (NASDAQ:WDAY)’s mid-teens revenue growth expectation over the coming years. These include a strong back-to-base motion that can leverage organic and inorganic innovation, improvements associated with go-to-market productivity, and elevated traction in Financial Management Solutions and Human Capital Management in the Middle and Emerging Enterprise segment.
The broader growth in the SaaS industry focuses on integrating platforms that unify workflows. Workday, Inc. (NASDAQ:WDAY)’s unified HCM, finance, and planning solutions focus on meeting a demand for end-to-end systems that reduce complexity and improve efficiency. With SaaS adoption expanding beyond large enterprises and into mid-sized businesses, the company is well-placed to cater to this broader market. Polen Capital, an investment management company, released a Q3 2024 investor letter. Hereis what the fund said:
“We added to several existing positions in the quarter including Adobe, Workday, Inc. (NASDAQ:WDAY), Shopify, MSCI, and Paycom Software. Workday is still growing revenue at a mid-to-high-teens rate, but in recent years, slower macroeconomic growth has made closing deals more challenging. Amidst a pullback, we increased our position as we found the valuation attractive for a well-positioned, recurring revenue business with still strong growth potential. The company also recently stated publicly that it will be focused on expanding profit margins meaningfully over the next five years—something we have expected and are pleased to see.”
Overall, WDAY ranks 3rd on our list of best SaaS stocks to invest in. While we acknowledge the potential of WDAY 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 WDAY but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
