While the market is hovering near an all-time high, not every group of stocks has been a winner. In fact, there has been a brutal sell-off in the software-as-a-service (SaaS) space.
Right now, the growing sentiment is that organizations will simply build their own custom software solutions using vibe coding, or that artificial intelligence (AI) will just help bypass the software layer. Every time a company like Anthropic makes an announcement about its Claude model, which is particularly strong in coding, SaaS stocks take a hit.
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However, let’s take a look at two SaaS stocks that seem primed for an AI era that could be surprise winners later this year.
The SaaS companies that are likely to not only survive the SaaS apocalypse, but thrive in the age of AI, are those that are deeply integrated into their customers’ data and workflow. That fits in perfectly ServiceNow‘S (NYSE: NOW) wheelhouse. The company started as a leader in IT service management (ITSM) before expanding into the areas of human resources and customer service. One of the platform’s strengths was its ability to connect departments in silos to build a unified system of record across departments.
This is a strong position within the AI enterprise space, because AI needs clean, uniform data to avoid costly AI hallucinations (incorrect or fabricated information). While AI hallucinations are generally annoying in a consumer environment when it comes to AI chatbots, they can be devastating if AI goes off the rails, potentially seriously harming a company’s business. Meanwhile, ServiceNow’s platform is tightly intertwined with its customer base through security protocols, custom business logic, audit trails, and security protocols that cannot simply be replaced or replicated.
At the same time, the company has embraced AI to drive growth. Its generative AI solutions suite, Now Assist, has reached an annual contract value of $600 million and is now on track to reach $1 billion by the end of the year. Meanwhile, it aims to become an agentic AI orchestration platform with its Control Tower solution. The recent acquisition of Armis will add an asset visibility layer, while Veza adds rights clearance.
The SaaS sell-off has sent ServiceNow shares down to an attractive valuation. It now trades at a price-to-earnings (P/S) ratio of just 6.5 and a price-to-earnings ratio of 24 times, based on analyst estimates from 2026. Given its valuation and importance in the business world, the stock could be a good rally candidate.
