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Why the SaaS Cloud Boom has Room to Run (USAQ, WDAY, SHOP, ADBE)


The pandemic may be coming to a close – we hope! – but the boom in Software-as-a-Service (“SaaS”) stocks may be just beginning.
The thinking last year was about the expanding market in the depths of the pandemic for services catering to life online. This idea merged with the evolution of the software space granting boomtimes to the SaaS space as droves of companies shifting from selling software products with licenses in a product cycle to selling subscriptions to a software service that would be continuously improved and updated.
January and February resulted in a major peak in many of these stocks, which have pulled back sharply as investors move on to a portfolio of stocks that cater to the “reopening theme” – movie theaters, restaurants, hotels, cruise liners. In short, we went from online life back to the real world, in investment allocations at the margin. ....

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