3 SaaS Stocks I'd Buy Right Now -- Even With the AI Threat

The article argues that despite AI-driven pressure on SaaS valuations, three software stocks may still warrant a closer look, highlighting CrowdStrike, Datadog, and Unity Software. It is primarily an opinion piece rather than breaking news, with no new financial results or guidance, so the direct market impact is likely limited. The piece reflects cautious optimism toward select software names amid broad sector weakness.

Analysis

The market is treating AI as a uniform headwind for software, but the real dispersion is between vendors selling “nice-to-have workflow” and those embedded in mission-critical budgets. Security and observability names with high renewal leverage and low implementation friction should see the least structural damage because AI increases attack surface and system complexity, which tends to expand spend rather than compress it. By contrast, generic horizontal SaaS faces a tougher path: AI assistants can unbundle features faster than legacy software can re-price them.

The second-order effect is that AI adoption may actually improve the franchise quality of the strongest platforms. When customers consolidate tools to reduce integration overhead, the vendors that sit closest to data, telemetry, or security telemetry become the default control points; that creates winner-take-more behavior even in a cautious IT budget environment. This matters most over the next 6–18 months, as renewal cycles reveal whether AI is a feature tax or a budget expansion line item.

The contrarian angle is that recent selling has likely overshot for names with durable usage-based or security-driven demand. The market is pricing in margin compression from AI, but for companies where AI lowers internal support costs and increases product stickiness, operating leverage can re-accelerate after a short investment phase. The key risk is not AI obsolescence per se, but a 2-3 quarter period where customers delay seat expansion while they test AI-native alternatives, which can create noisy deceleration before fundamentals stabilize.

Among the group, CrowdStrike looks the cleanest relative beneficiary on a multi-quarter view because AI-driven endpoint complexity strengthens its value proposition rather than weakens it. Datadog also looks attractive if management can keep monetizing product breadth; observability is one of the few areas where AI usage itself creates more data to ingest and more demand for monitoring. Unity is the more speculative case: AI can improve creation tooling, but the business still depends on a healthier developer spend cycle and evidence that AI features translate into incremental monetization rather than just retention.

Key Decisions for Investors

• Long CRWD on a 6-12 month horizon; use recent weakness to build a position because AI raises security spend intensity. Risk/reward favors upside if renewals remain strong, with downside limited unless enterprise IT budgets roll over broadly.
• Long DDOG as a quality compounder over 3-6 quarters; AI-driven workload growth should expand observability demand. Best entry is on any post-earnings pullback tied to margin investment, not demand weakness.
• Avoid chasing U until there is evidence of monetization from AI tooling; this is a show-me story. If owning the space, prefer a small starter position only after confirmation that AI features are lifting bookings, not just engagement.
• Pair trade: long CRWD / short a broad SaaS basket over 3-6 months. The thesis is that security spend is more defensive and structurally AI-enhanced, while generic SaaS is more exposed to feature commoditization.
• If risk appetite is high, buy DDOG call spreads 4-6 months out to express upside from AI data growth with defined downside; structure strikes around a post-earnings volatility reset for better premium efficiency.