SaaS stocks: is it a buying opportunity in June 2026?

TABLE OF CONTENTS

So, is SaaS a buying opportunity in June 2026?

SaaS stocks: is it a buying opportunity in June 2026?

Are SaaS stocks a buying opportunity in June 2026? Explore AI fears, SaaS drawdowns, and the financial health of ServiceNow, UiPath, SAP and Salesforce.

Yuri Drabik

Jun 10, 2026

Large enterprise SaaS (Software-as-a-Service) companies are well-known as lucrative investment on the stock market. “Notoriously” high margins, huge cash reserves and stable subscription-based revenue are what investors love to see in reports of any business.

But in the second part of 2025, when AI-boom started to overheat the markets, the sentiment that the SaaS businesses are obsolete, came in and rapidly settled. Investors started panicking and adjusting their portfolios accordingly. AI narrative was difficult to ignore. And it made many investors believe that the SaaS industry is dying and will be replaced by AI. But let’s look at the situation in June 2026.

Where are we standing now?

Let’s look at the chart below representing a stock index of largest public SaaS companies with heavy AI exposure on the software level. As you can see, the average 1 year price drop across these companies is around -40%. This is heavy. The stocks started sharp decline in November 2025 and were falling down until April 2026. Then was a short period of accumulation and short spike up which indicates a strong interest for the recovery. However, we’ve noticed a significant pullback down to the resistance level around 6600-6800.

At this point, I would not say that the reversal is fully confirmed. But the structure is already interesting. When a strong index drops almost 40% in one year, then stops falling for several weeks, then shows a sharp recovery attempt, it usually means that some investors are no longer selling the panic. They are starting to build positions again.

The most important thing here is that AI-SOFT.INV is not just a random software chart. This index tracks companies whose core products are AI-driven software, analytics platforms, automation systems or proprietary AI models. It is equal-weighted and rebalanced monthly, so the chart shows the broader condition of the AI-software segment, not only the performance of one or two mega-cap companies.

And this is exactly why the decline is so important. It tells us that the market did not punish only weak businesses. It punished the whole theme. The selloff was broad. Investors started treating AI-software companies as a risky and uncertain group. This segment is, indeed, more sensitive to competitive pressure, fast innovation cycles and valuation changes, with risks such as model commoditization, customer churn and technological displacement.

So the fear is not fully irrational. It has a real base. AI agents can potentially reduce the need for some traditional SaaS seats. AI-native startups can copy simple software functions much faster than before. Some enterprises may decide that they do not need 20 different SaaS tools if one AI layer can connect with internal data and perform tasks directly.

But here is the other side. Enterprise SaaS is not only about “features”. It is about workflows, permissions, compliance, customer data, integrations, security, audit history and mission-critical business processes. These are not easy to replace overnight. This is why I believe the market moved from realistic caution into emotional panic.

Reuters reported that software and services stocks lost around $830 billion in market value in only six trading days during the AI-disruption panic. Forrester also called this period a “SaaS-pocalypse”, explaining that the market was pricing a massive shift in how work gets done because of agentic AI.

But then Morgan Stanley made an important point: investors were punishing software and data stocks because of AI disruption fears, while the fundamentals did not fully confirm this level of panic.

This is where the opportunity may appear. Not because SaaS is risk-free. It is not. But because the best SaaS companies may not be dying. They may be changing.

ServiceNow ($NOW)

ServiceNow is one of the highest-quality companies in the enterprise SaaS universe. And if we look at the latest numbers, it is hard to say that the business is collapsing.

In Q1 2026, ServiceNow reported subscription revenue of $3.67 billion, up 22% year-over-year. Total revenue was $3.77 billion, also up 22% year-over-year. This is still very strong growth for a company of this size.

The company is also not dependent only on current revenue. Its backlog is very strong. Current remaining performance obligations grew 22.5%, and total remaining performance obligations reached $27.7 billion, up 25%. This means that customers are still signing long-term contracts and still committing money to the platform.

This is important because ServiceNow is not a small experimental AI tool. It is a workflow operating system for large enterprises. Companies use it to manage IT, HR, customer service, security operations and many internal processes. AI can disrupt some parts of it, but AI can also make the platform more valuable.

The company is already showing this. ServiceNow said that Now Assist customers with more than $1 million in annual contract value grew more than 130% year-over-year. So AI is not only a risk for ServiceNow. It is also a monetization layer.

From the financial health perspective, $NOW still looks very solid. It has high subscription revenue, large backlog, strong cash generation and a very clear enterprise position. The problem is not the quality of the business. The problem is valuation and expectations. If investors expect 20%+ growth for many years, even small doubts can damage the stock price heavily.

So $NOW is probably not the cheapest stock in this group. But it may be one of the strongest fundamentally.

UiPath ($PATH)

UiPath is more controversial. It is also probably the most interesting from the risk/reward perspective.

The market fear around UiPath is very simple. The company was known for robotic process automation. But now investors ask: if AI agents can automate tasks directly, do we still need RPA?

This is a fair question. But again, the latest financials do not show a dead company.

In Q1 2026, UiPath reported revenue of $418 million, up 17% year-over-year. ARR reached $1.9 billion, up 12% year-over-year. Dollar-based net retention was 109%, GAAP gross margin was 82%, and the company generated $132 million of operating cash flow.

This is not hypergrowth anymore. But it is still growth. And more importantly, UiPath is profitable and cash-generative. The company also reported GAAP operating income of $28 million and non-GAAP operating income of $92 million.

For $PATH, the main question is not survival. The main question is positioning. Can UiPath become an orchestration and automation execution layer for enterprise AI? Or will it be viewed as an old RPA company which AI agents can replace?

If the first scenario happens, the stock may have serious upside because the market is pricing a lot of pessimism. If the second scenario happens, the valuation can stay depressed for a long time.

So $PATH is not the safest stock here. But it is one of those names where sentiment can change very fast if the company proves that agentic AI expands its market instead of destroying it.

SAP ($SAP)

SAP is a different type of SaaS stock. It is older, larger and more enterprise-heavy. But this is not a weakness in the current environment. In fact, it may be a strength.

SAP owns some of the most important enterprise systems in the world. ERP is not something companies replace easily. It is deeply connected with finance, supply chain, HR, procurement and operations. This makes SAP less exciting than small AI-native software stocks, but also much harder to disrupt quickly.

The latest numbers are strong. In Q1 2026, SAP reported current cloud backlog of €21.9 billion, up 20%, or 25% at constant currencies. Cloud revenue grew 19%, or 27% at constant currencies. Cloud ERP Suite revenue grew 23%, or 30% at constant currencies.

This is exactly what investors should want to see from SAP. The company is still moving customers to the cloud, still growing its cloud backlog and still improving profitability. Non-IFRS operating profit grew 17%, or 24% at constant currencies.

SAP also has one of the most realistic AI stories in enterprise software. Its AI does not need to replace the whole business model. It can be embedded into existing ERP workflows. That is powerful because customers already store their most important business data inside SAP systems.

The risk is that SAP is not a pure SaaS hypergrowth company. It is a slower and more complex business. Currency, geopolitics, European exposure and cloud transition risks still exist. But fundamentally, SAP looks much healthier than the stock chart suggests.

Salesforce ($CRM)

Salesforce is maybe the most emotionally debated stock in this group.

On one hand, investors worry that CRM software is exactly the type of product AI agents may attack. Sales workflows, customer support, marketing tasks and analytics can all be affected by AI. This is why $CRM became one of the symbols of the SaaS panic.

On the other hand, Salesforce is still a financial machine.

In Q1 fiscal 2026, Salesforce reported total revenue of $11.13 billion, up 13% year-over-year. Subscription and support revenue reached $10.6 billion, up 14%. Current remaining performance obligation was $33.6 billion, up 14%, and total remaining performance obligation was $67.9 billion, up 11%.

The company is also highly profitable. Salesforce reported a GAAP operating margin of 21.1% and non-GAAP operating margin of 34.8%. Operating cash flow was $6.7 billion, and free cash flow was $6.56 billion.

This is not a weak business. The market is not questioning whether Salesforce can generate cash. The market is questioning whether Salesforce can grow faster again.

The most important part is Agentforce and Data 360. Salesforce said that Agentforce and Data 360 ARR reached nearly $3.4 billion, up more than 200% year-over-year, including $1.2 billion of Agentforce ARR.

This is a serious number. It shows that Salesforce is not just adding AI branding to old products. There is already a real revenue stream around AI and data. But the stock still needs to prove that this AI revenue can become large enough to offset pressure on the traditional CRM model.

So $CRM looks like a classic “cheap for a reason” stock. The business is profitable, cash-generative and deeply embedded. But growth expectations are lower, and investors need proof that AI is a new growth engine, not just a defensive tool.

Comparing drawdowns

Now let’s compare the drawdowns of these 4 stocks.

This is where the chart becomes very important. I would include drawdown screenshots here, because the numbers alone do not show the full psychology of the move.

As of the latest market data, the drawdowns are very deep:

Stock	Recent price	52-week high	Approx. drawdown	Upside to 52-week high
$NOW	$102.15	$211.48	-52%	+107%
$PATH	$10.55	$19.84	-47%	+88%
$SAP	$164.18	$313.28	-48%	+91%
$CRM	$165.89	$276.80	-40%	+67%

Recent prices are based on latest available market data for NOW, PATH, SAP and CRM. The 52-week highs are based on market data pages for the same stocks. These are not small corrections, but rather serious bear-market style drawdowns.

And this is exactly why the setup is interesting. A stock down 40-50% does not automatically mean it is cheap. Sometimes stocks are down for a very good reason. But when companies are still growing revenue, still generating cash and still holding strong enterprise positions, such drawdowns can create recovery potential.

$NOW has the largest upside to its 52-week high, but also still trades as a premium-quality company. $PATH has the most speculative upside because the market is not sure what the company becomes in the AI-agent era (and its drawdown looks very different to the others, as you can see). $SAP looks like a more stable enterprise cloud compounder that was punished together with the group. $CRM looks mature, but the valuation reset is already big and the company still produces huge free cash flow.

So, is SaaS a buying opportunity in June 2026?

In my view, yes. But only selectively.

This is not a moment to buy every SaaS stock blindly. The AI risk is real. Some SaaS companies will lose pricing power. Some products will be replaced. Some features that were once valuable will become commodities. Seat-based pricing may also come under pressure if AI agents do more work with fewer human users.

But the panic looks excessive for the strongest companies.

The market started pricing a scenario where AI simply kills SaaS. But the more realistic scenario is different. AI will probably separate SaaS companies into two groups:

The first group will be weak software companies with shallow products, low switching costs and no strong data advantage. These companies are in real danger.

The second group will be enterprise platforms with deep workflows, customer data, compliance, integrations and distribution. These companies may actually become more valuable because AI needs a place to operate, data to use and workflows to execute.

$NOW, $SAP and $CRM clearly belong closer to the second group. $PATH is more risky, but it also has a chance to become an important automation layer for agentic AI.

This is why the current decline may be more of a reset than a collapse. Investors were scared, and the fear was understandable. But the fundamentals are still strong enough to support recovery if sentiment stabilizes.

The upside potential is meaningful. A recovery back to 52-week highs would imply around +67% to +107% upside across these four names. This does not mean the stocks will return there quickly. It only shows how much valuation damage has already happened.

The risks are also serious. If AI agents reduce SaaS seats faster than companies can monetize AI features, revenue growth may slow. If AI-native startups offer similar products at much lower prices, margins may compress. If enterprise budgets weaken, even strong software companies can continue falling. And if the market demands lower valuation multiples for all software stocks, recovery can take longer than expected.

But in June 2026, the SaaS industry does not look dead. It looks shocked, repriced and forced to prove itself again. And this is often where long-term opportunities appear.

Canadian Stock Exchange: How Canada’s Stock Market Works

Yuri Drabik

Founder at Investorean