3 Stocks That Benefit if Companies Cut Costs in 2026

We are entering a new earnings season. Earnings reports are crucial to understanding a company’s outlook for revenue and profit in the coming quarters, especially as headwinds still exist in many sectors of the economy.

In a market that’s increasingly rewarding profitability and cash flow, guidance on operating discipline can move stocks as much as revenue growth.

That's why many companies are increasingly focused on defending margins, streamlining operations, and doing more with fewer people. As corporations take cost-cutting measures, a powerful tailwind is forming for a specific class of technology stocks: those that help businesses cut costs, automate workflows, and optimize expenses. Payroll automation, accounts payable digitization, and human capital management platforms are becoming essential tools for businesses of all sizes.

Cost-Cutting Is Becoming Structural

Companies are increasingly designing organizations to be permanently lean, using software to replace manual processes rather than simply trimming expenses during downturns.

That creates a durable investment tailwind for platforms that can automate repetitive administrative work, improve compliance without adding staff, and deliver clear and measurable cost savings.

For investors looking for ideas around this theme, here are three software stocks that are positioned to benefit from this structural shift in 2026. Each company targets a different part of the corporate cost structure, but the common denominator is how they monetize the underlying trend of doing more with less.

The Quiet Beneficiary of Workforce Optimization

First up is Automatic Data Processing Inc. (NASDAQ: ADP). In the last five years, ADP stock has delivered a total return of over 72.5%.

The company is growing revenue and earnings per share (EPS) year-over-year. That highlights the company’s central positioning to every company’s largest cost-cutting initiative (i.e., payroll). Even when companies are contracting their own headcount, they still need trusted platforms to ensure compliance in payroll, tax withholding, and benefits administration.

ADP provides all of these services, and more, at a scale that gives it a powerful margin advantage. In recent years, that’s helped the company invest in automation and AI-driven compliance tools to expand its lead over smaller competitors.

For investors, ADP offers something rare in a cost-cutting cycle: dependable cash flow, recurring revenue, and exposure to corporate efficiency trends without the volatility of smaller Software as a Service (SaaS) names.

The company also pays a dividend that it has increased at an average annual rate of over 11.3% in the last three years. ADP has increased its dividend for more than 50 consecutive years, making it a dividend king.

Automating the Back Office for Small and Mid-Sized Businesses

If ADP represents the blue-chip “slam dunk” in this sector, BILL Holdings Inc. (NYSE: BILL) represents a more asymmetric investment. BILL stock has posted negative gains for three of the past five years. 

However, analysts are projecting strong revenue and earnings growth in the next 12 months. That’s due to the company’s position in the area of business payments, another area that leans into automation and AI-driven solutions.

That's particularly true for small- and mid-sized businesses (SMBs) that make up the core of BILL’s business. BILL’s value proposition is about replacing spreadsheets, paper checks, and fragmented workflows with a single automated platform.

Small- and mid-sized businesses (SMBs) make up the core of BILL’s customers.

And in 2026, the company is moving to a new platform, Embed 2.0, that will feature “plug-and-play" infrastructure that lets customers insert BILL’s payment rails directly into their existing software.

Premium Automation in Human Capital Management

Paycom Software Inc. (NYSE: PAYC) occupies a more specialized niche than ADP. The company’s cloud-based human capital management (HCM) software unifies payroll, HR, benefits, and compliance in a single system.

Its defining feature is employee self-service automation, which shifts administrative tasks away from HR departments and onto users through intuitive workflows.

By automating onboarding, time tracking, benefits enrollment, and tax documentation, Paycom allows organizations to manage growing complexity with fewer back-office employees.

Since hitting an all-time high near $550 per share in 2021, PAYC stock has been in a sustained decline. However, there are technical signals that point to the stock finding a bottom.

Plus, analysts are forecasting stronger revenue and earnings growth in the next 12 months. All of that is supported by a consensus price target around $221, which would be nearly a 40% gain from the stock’s price on Jan. 7.

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