Investing in SaaS Stocks

By Jeremy Bowman – Updated Aug 29, 2025 at 8:12 PM | Fact-checked by Frank Bass

Key Points

SaaS stocks offer recurring revenue and tech advancements, but high valuations may dampen returns.
Microsoft continues to lead by adapting to SaaS, with significant subscriber and revenue growth.
Consider customer acquisition costs and price-to-sales ratio when evaluating SaaS stocks' value.

The software-as-a-service (SaaS) business model has become the norm for many software companies. A SaaS stock is the stock of a publicly traded company that makes most of its money from selling software through the cloud.

Customers who subscribe to a software product that's continually updated benefit from the latest technology and increased pricing flexibility, while software businesses receive attractive streams of recurring revenue. The SaaS trend has been a significant driver of growth in the tech industry.

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A graphic comparing the similarities and differences between the software-as-a-service model and the traditional model. — Image source: The Motley Fool.

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Ticker Information Table
Company	Ticker	Market cap	Sector
Microsoft	NASDAQ:MSFT	$3.8 trillion	Information Technology
Adobe	NASDAQ:ADBE	$142.5 billion	Information Technology
Salesforce	NYSE:CRM	$247.9 billion	Information Technology
Shopify	NASDAQ:SHOP	$226.0 billion	Information Technology
Palantir Technologies	NASDAQ:PLTR	$475.6 billion	Information Technology

Data as of Nov 3, 2025.

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NASDAQ: MSFT

Microsoft

Today's Change

(-1.45%) $-7.62

Current Price

$518.14

Key Data Points

Market Cap

$3849B

Day's Range

$515.10 - $529.23

52wk Range

$344.79 - $555.45

Volume

1.7K

Avg Vol

21M

Gross Margin

68.76%

Dividend Yield

0.01%

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NASDAQ: ADBE

Adobe

Today's Change

(0.32%) $1.07

Current Price

$340.31

Key Data Points

Market Cap

$142B

Day's Range

$336.80 - $341.26

52wk Range

$327.50 - $557.90

Volume

4.8K

Avg Vol

4.4M

Gross Margin

88.43%

Dividend Yield

N/A

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NYSE: CRM

Salesforce

Today's Change

(1.47%) $3.76

Current Price

$260.41

Key Data Points

Market Cap

$248B

Day's Range

$252.63 - $261.82

52wk Range

$226.48 - $369.00

Volume

Avg Vol

9.3M

Gross Margin

69.91%

Dividend Yield

0.01%

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NASDAQ: SHOP

Shopify

Today's Change

(0.16%) $0.27

Current Price

$173.88

Key Data Points

Market Cap

$226B

Day's Range

$171.72 - $179.73

52wk Range

$69.84 - $182.19

Volume

115

Avg Vol

8.1M

Gross Margin

49.21%

Dividend Yield

N/A

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NASDAQ: PLTR

Palantir Technologies

Today's Change

(3.04%) $5.92

Current Price

$200.47

Key Data Points

Market Cap

$476B

Day's Range

$197.92 - $204.18

52wk Range

$41.03 - $204.18

Volume

613K

Avg Vol

62M

Gross Margin

80.03%

Dividend Yield

N/A

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In 2023, the company introduced its Artificial Intelligence Platform (AIP), an AI layer that works with its other platforms. That move has supercharged its growth, with revenue accelerating to almost 50% in the second quarter of 2025, and profit margins steadily expanding.

Palantir was also the best-performing stock on the S&P 500 in 2024, and through August, it was on track to be the top-performing one in 2025 as well.

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About the Author

Jeremy Bowman has been a contributing Motley Fool stock market analyst, covering technology, consumer goods, and macroeconomic trends since 2011. Before The Motley Fool, Jeremy was a newspaper reporter, restaurant manager, and English teacher abroad. He holds a bachelor’s degree in English from Colorado College and a master’s degree in business administration from American University. One of his Motley Fool headlines was briefly featured on Late Night with Stephen Colbert.

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Jeremy Bowman has positions in Shopify. The Motley Fool has positions in and recommends Adobe, Alphabet, Datadog, Microsoft, Palantir Technologies, Salesforce, and Shopify. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.