SaaS Stocks Are Back in Business -- and These 2 Are Soaring
When stock markets were falling in September and October, questions about technology stocks abounded. Some market participants believed that sluggish macroeconomic conditions would force companies to rein in their spending on IT. That weighed especially hard on software-as-a-service (SaaS) stocks, since any pullback in new subscription activity would further slow their growth.
In November, though, investors have gotten more confident about the economy's prospects, and that has generally been good for SaaS stocks. The bullish move for the industry got a nice boost late Wednesday, and shares of SaaS pioneer Salesforce (NYSE: CRM) are rising sharply along with those of data cloud specialist Snowflake (NYSE: SNOW). Read on to learn why investors are so excited about the prospects for these two companies.
Shares of Salesforce rose 9% in premarket trading on Thursday morning. The customer relationship management (CRM) software innovator reported fiscal third-quarter financial results for the period ended Oct. 31 that showed that its enterprise customers are hanging in there and spending more on its software platform.