Favorable Application SaaS Outlook Bodes Well for Five9 (FIVN)

Five9 Incorporated (NASDAQ:FIVN) is one of the 9 small-cap software infrastructure stocks with highest upside potential.

On January 15, the price target on Five9 Incorporated (NASDAQ:FIVN) was reduced from $30 to $26 by Morgan Stanley analyst Elizabeth Porter, who maintained an Equal Weight rating on the stock. Following her revision, the stock still offers an upside of more than 59%.

Porter highlighted that Application SaaS companies delivered weaker returns in 2025 relative to both the broader software segment and the underlying technology vertical. She noted that AI-related risks may not turn out to be as intense as anticipated, which leads to a more favorable outlook for the Application SaaS segment. However, the firm remains cautious and selective amid limited signs of increased software spending.

On January 12, Barclays analyst Raimo Lenschow reduced his target price on Five9 Incorporated (NASDAQ:FIVN) from $29 to $25. The analyst maintained an Overweight rating on the stock with an upside potential of more than 53%.

Lenschow’s rating is based on Barclays’ revisions across the Software segment in line with its 2026 outlook. The firm noted steady Macro and IT spending, depressed valuations, and the sector remaining out of favor at present.

Five9 Incorporated (NASDAQ:FIVN) is a contact center as a service (CCaaS) software provider that offers intelligent cloud-based solutions for contact centers. Its CX platform comprises an extensive suite of applications that facilitate various functions related to customer service, sales, and marketing. The platform delivers services such as virtual assistance, workflow automation, AI insights & summaries, and revenue execution.

While we acknowledge the potential of FIVN as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: 15 Most Promising Mid-Cap Healthcare Stocks Under $50 and 11 Most Promising Small-Cap Industrial Stocks Under $50.

Disclosure: None. This article is originally published at Insider Monkey.