Earlier this year, growth shares in the software space took a huge hit. At the time, there were fears that artificial intelligence (AI) was going to completely wipe out the industry.
Recently however, two software stocks in my portfolio have staged massive rebounds – Snowflake (NYSE: SNOW) and CrowdStrike (NASDAQ: CRWD). It seems the market has decided that not all software companies are going to be impacted negatively by AI and that these companies could be two of the biggest winners in the industry.
Snowflake’s benefitting from the AI boom
Snowflake’s share price recently rose above $300. That’s pretty incredible given that in April it was below $125. I’m not surprised to see it above $300 though, because I always believed this data storage and analytics company would have success in the AI era.
Ultimately, it’s focused on the one thing AI can’t operate without – data. Using its platform, companies can bring all this together, structure it properly, and then apply AI models to it to generate insights.
Note that the company’s AI model-agnostic: whether a business wants to use models from OpenAI, Anthropic, DeepSeek, or other companies, it can.
It seems investors are finally waking up to the opportunity here. The fact that the share price has more than doubled since April – and broken out to levels not seen since 2022 shortly after its IPO – tells us that the market’s catching on to the fact that this company’s going to benefit from AI rather than be disrupted by it.
Strong results have helped. Last quarter, product revenue was up 34% year on year with net revenue retention coming in at 126%.
Is the stock still worth considering today? I think so – the share price trend is up. That said, it’s quite expensive after its recent surge and this adds risk as the valuation now leaves little room for a growth slowdown.
So investors may want to consider buying in over time. That’s what I’ve done with this stock.
CrowdStrike’s protecting companies from AI threats
Turning to CrowdStrike – which is widely regarded as one of the world’s leading cybersecurity companies – its share price has soared to around $200. Back in March, it was below $100 (factoring in a recent stock split).
Clearly, sentiment’s improved dramatically. Again, I’m not surprised – I always believed that AI would increase demand for CrowdStrike’s cybersecurity solutions, not decrease it.
It seems the launch of Claude Mythos was a bit of a game-changer for this stock. This AI model was so good at identifying software security flaws that its developer Anthropic teamed up directly with CrowdStrike to help companies defend against it.
