Needham names top SaaS picks amid Meta Enterprise Platform concerns

Investing.com -- Needham analyst Scott Berg identified three software stocks as top picks following a recent market selloff triggered by Meta's Enterprise Platform announcement, noting that the new offering does not directly compete with enterprise software vendors in his coverage universe.

Meta announced yesterday morning a new Enterprise Platform integrating the company's coding agents, models and infrastructure, which drove another decline in AI and enterprise software stocks. Berg views the announcement as the final step in Meta's year-long shift from consumer AI to enterprise AI, accelerated by the company's transition to proprietary models.

The analyst expects Meta's new platform will compete directly with frontier model vendors like Anthropic and OpenAI for parts of the UI layer or personal productivity agents versus full-blown enterprise software, albeit likely at a lower price point. He also anticipates an expansion into broader cloud hyperscale-type computing over time to compete with AWS, Azure, or GCP. While Meta's Muse AI agent has seen explosive growth, Berg believes the product will likely remain focused on the personal side given compliance and data privacy concerns within the enterprise.

With the recent general macro selloff, Berg highlighted BRZE, NAVN, and TTAN as his best end-of-year picks in the SaaS sector.

1. Braze Inc Class A (NASDAQ: BRZE) - Berg views BRZE as a victim of its own successes over the past 12 months and believes a one quarter modest growth slowdown reflects comp issues and timing versus a material demand slowdown. His work in the marketing software space remains robust, which is positive for the second-half pipeline.

2. Navan Inc Class A (NASDAQ: NAVN) - On Navan, expectations likely got too high in the short-term after a strong first quarter, but second quarter growth remained materially ahead of fiscal 2026 levels. Demand trends remain high, and Berg thinks elevated oil and fuel costs have historically not impacted corporate travel in the short-term, creating a favorable third quarter setup.

3. ServiceTitan Inc Class A (NASDAQ: TTAN) - Berg notes that GTV volatility will likely be part of the narrative for as long as the company is public. Weather, timing, and a number of nuances can drive random variances quarter to quarter. However, he is leaning into the heavy Max AI narrative, noting the market has wanted vendors to lean into new AI innovations harder over the last several years, which should be a proven revenue driver moving into calendar year 2027.

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