Opportunities and Challenges for Software Stocks in the AI Era
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 5 days ago
0mins
Should l Buy CRWD?
Source: Fool
- Cybersecurity Advantage: CrowdStrike Holdings (CRWD) leverages its cloud-based Falcon platform to analyze endpoint data using AI and machine learning, achieving a gross margin of 74.1%; despite recent stock declines due to AI security demonstrations, its first-party data advantage positions it competitively for the future.
- Key Data Infrastructure: Snowflake (SNOW) serves as a data infrastructure company that enables enterprises to securely store and query data, with a recent quarterly revenue growth of 29% year-over-year and a current price-to-sales ratio of 13, indicating its increasing importance as AI adoption rises, making it a worthy long-term investment.
- E-commerce Ecosystem: Shopify (SHOP) provides comprehensive e-commerce solutions for millions of merchants, accounting for approximately 10% of global e-commerce volume; while facing AI challenges, its convenience and integration capabilities ensure strong competitiveness moving forward, with revenue growth exceeding 30% year-over-year in the latest quarter.
- Market Rebound Potential: Despite the sell-off in software stocks due to AI threats, companies like CrowdStrike, Snowflake, and Shopify demonstrate strong performance and growth potential in their respective fields, indicating a significant rebound opportunity by 2026, encouraging investors to seize the current undervaluation.
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Analyst Views on CRWD
Wall Street analysts forecast CRWD stock price to rise
34 Analyst Rating
23 Buy
11 Hold
0 Sell
Moderate Buy
Current: 371.980
Low
353.00
Averages
559.71
High
640.00
Current: 371.980
Low
353.00
Averages
559.71
High
640.00
About CRWD
CrowdStrike Holdings, Inc. is a global cybersecurity company that provides cloud-delivered protection of endpoints, cloud workloads, identity and data. Its Falcon platform is designed for cybersecurity consolidation, purpose-built to stop breaches. The platforms collect and integrate data from across the enterprise, including endpoints, cloud workloads, identities, and third-party sources. It offers 29 cloud modules on its Falcon platform via a software as a service (SaaS) subscription-based model that spans multiple large markets, including corporate endpoint and cloud workload security, managed security services, security and vulnerability management, information technology (IT) operations management, identity protection, next-generation security information and event management (SIEM) and log management, threat intelligence services, data protection, SaaS security posture management, automation and response (SOAR) and artificial intelligence powered workflow automation, and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
CrowdStrike Earnings Preview: Revenue Expected to Grow 22.6%
- Strong Revenue Performance: CrowdStrike reported $1.23 billion in revenue last quarter, reflecting a 22.2% year-over-year increase that exceeded analyst expectations, showcasing the company's robust growth potential in the cybersecurity sector.
- Market Expectation Analysis: This quarter, the market anticipates CrowdStrike's revenue to grow by 22.6% year-over-year, although this represents a slowdown from the 25.2% growth recorded in the same quarter last year, indicating a cautious outlook on the company's future performance.
- Analyst Confidence: Over the past 30 days, analysts covering CrowdStrike have generally reaffirmed their revenue estimates, suggesting confidence in the company's ability to maintain stability heading into earnings, as CrowdStrike rarely misses Wall Street's revenue targets.
- Stock Price Volatility Impact: Despite the underperformance of cybersecurity stocks in a volatile market environment, CrowdStrike's stock has declined by 15.6% over the past month, with a current share price of $370.47 compared to an average analyst price target of $520.38, reflecting optimistic market expectations for its future growth.
See More
Market Update: Focus on Retail Earnings and Oil Prices
- Retail Earnings: Target (TGT) is set to announce its fourth-quarter results on Tuesday, where despite a decline in store traffic, digital sales have helped mitigate some pressure, and investors will closely watch for any guidance commentary to assess the effectiveness of the company's turnaround efforts.
- Ross Exceeds Expectations: Ross (ROST) is expected to surpass revenue estimates, driven by consumers trading down and seeking discounts on recognizable brands, reflecting the economic environment's impact on retail behavior.
- Oil Price Volatility: Oil prices are moving sharply amid concerns over regional stability, with investors monitoring the potential impact on shipping through the Strait of Hormuz, a critical artery for global crude flows.
- Fed Officials Speak: Multiple Federal Reserve presidents will speak on Tuesday, with markets looking for signals regarding the path of interest rates, especially in light of recent geopolitical tensions and mixed economic data, as investors seek clarity on future rate policies.
See More
Tech Stocks Rise, Market Sentiment Improves
- Market Sentiment Improves: Late Monday afternoon, tech stocks broadly rose, reflecting investor optimism about the technology sector's outlook, which may drive increased trading activity going forward.
- Investor Focus: As tech stocks rise, market participants are beginning to reassess their portfolios, potentially leading to capital inflows into the tech sector, further boosting the stock performance of related companies.
- Sector Performance: The Technology Select Sector SPDR ETF showed strong performance, indicating market confidence in the profitability of tech companies, which may attract more investor attention to this sector.
- Future Outlook: If tech stocks continue to rise, it could stimulate a broader market recovery, with investors closely monitoring upcoming economic data and corporate earnings reports to assess the potential for sustained market growth.
See More
CrowdStrike Q4 Earnings Outlook Amid AI Pressure
- Earnings Expectations: CrowdStrike anticipates Q4 revenue of $1.30 billion, a 22% increase from $1.06 billion last year, indicating strong growth despite an expected drop in earnings per share from $1.03 to $0.74, reflecting pressures from AI tools.
- Expert Insights: Jay Woods, Chief Market Strategist at Freedom Capital Markets, highlights that CrowdStrike's year-to-date stock decline is primarily due to AI disruption trades, urging investors to focus on annual recurring revenue trends to assess customer renewal and product value.
- Analyst Rating Change: Piper Sandler analyst Rob Owens upgraded CrowdStrike from Neutral to Overweight with a price target of $520, arguing that the market's AI concerns are an overreaction and emphasizing that recent acquisitions will enhance the company's competitive edge.
- Price Volatility Outlook: CrowdStrike shares rose 2.9% to $382.85 on Monday, despite a 15% year-to-date decline in 2026; analysts expect volatility post-earnings, with potential retests around the $420 downtrend area.
See More
CrowdStrike and Eli Lilly Options Trading Active
- CrowdStrike Options Volume: As of now, CrowdStrike Holdings Inc (CRWD) options have reached a trading volume of 25,887 contracts, equivalent to approximately 2.6 million shares, representing a significant 53.7% of its average daily trading volume over the past month, indicating strong market interest in the stock.
- High Strike Options Activity: Within CRWD, the $400 strike call option has been particularly active, with 1,316 contracts traded today, representing about 131,600 underlying shares, reflecting investor expectations for future price increases.
- Eli Lilly Options Volume: Concurrently, Eli Lilly (LLY) options have shown a trading volume of 19,886 contracts, approximately 2.0 million shares, accounting for 52.5% of its average daily trading volume over the past month, highlighting the stock's market activity.
- High Strike Options Focus: For LLY, the $1100 strike call option has also been notably active, with 1,461 contracts traded today, representing around 146,100 shares, indicating optimistic sentiment among investors regarding the stock's future performance.
See More
Market Recap: Oil Prices Surge, CrowdStrike Upgraded
- Market Volatility: The S&P 500 fell on Monday but briefly rebounded after the U.S. and Israel launched an attack on Iran, causing oil prices to spike; WTI crude prices, while off their highs, indicate a defensive market stance.
- CrowdStrike Upgrade: Piper Sandler upgraded CrowdStrike from hold to buy with a $520 price target, arguing that the nearly 19% year-to-date pullback is excessive, and sees AI as an opportunity rather than a threat, boosting market confidence.
- Nvidia Strategic Investments: Nvidia shares rose over 3% after being named a top pick by Morgan Stanley, with analysts noting that despite stagnant stock performance in the last two quarters, business has strengthened; the company announced $2 billion investments in both Coherent and Lumentum, highlighting its strategic focus in optics technology.
- Investor Recommendations: Jim Cramer advised investors without Nvidia positions to buy the stock, asserting that its current depressed price won't last long, even as Monday's gains still left shares lower year-to-date.
See More
CrowdStrike Earnings Preview: Revenue Expected to Grow 22.6%
- Strong Revenue Performance: CrowdStrike reported $1.23 billion in revenue last quarter, reflecting a 22.2% year-over-year increase that exceeded analyst expectations, showcasing the company's robust growth potential in the cybersecurity sector.
- Market Expectation Analysis: This quarter, the market anticipates CrowdStrike's revenue to grow by 22.6% year-over-year, although this represents a slowdown from the 25.2% growth recorded in the same quarter last year, indicating a cautious outlook on the company's future performance.
- Analyst Confidence: Over the past 30 days, analysts covering CrowdStrike have generally reaffirmed their revenue estimates, suggesting confidence in the company's ability to maintain stability heading into earnings, as CrowdStrike rarely misses Wall Street's revenue targets.
- Stock Price Volatility Impact: Despite the underperformance of cybersecurity stocks in a volatile market environment, CrowdStrike's stock has declined by 15.6% over the past month, with a current share price of $370.47 compared to an average analyst price target of $520.38, reflecting optimistic market expectations for its future growth.
See More
Market Update: Focus on Retail Earnings and Oil Prices
- Retail Earnings: Target (TGT) is set to announce its fourth-quarter results on Tuesday, where despite a decline in store traffic, digital sales have helped mitigate some pressure, and investors will closely watch for any guidance commentary to assess the effectiveness of the company's turnaround efforts.
- Ross Exceeds Expectations: Ross (ROST) is expected to surpass revenue estimates, driven by consumers trading down and seeking discounts on recognizable brands, reflecting the economic environment's impact on retail behavior.
- Oil Price Volatility: Oil prices are moving sharply amid concerns over regional stability, with investors monitoring the potential impact on shipping through the Strait of Hormuz, a critical artery for global crude flows.
- Fed Officials Speak: Multiple Federal Reserve presidents will speak on Tuesday, with markets looking for signals regarding the path of interest rates, especially in light of recent geopolitical tensions and mixed economic data, as investors seek clarity on future rate policies.
See More
Tech Stocks Rise, Market Sentiment Improves
- Market Sentiment Improves: Late Monday afternoon, tech stocks broadly rose, reflecting investor optimism about the technology sector's outlook, which may drive increased trading activity going forward.
- Investor Focus: As tech stocks rise, market participants are beginning to reassess their portfolios, potentially leading to capital inflows into the tech sector, further boosting the stock performance of related companies.
- Sector Performance: The Technology Select Sector SPDR ETF showed strong performance, indicating market confidence in the profitability of tech companies, which may attract more investor attention to this sector.
- Future Outlook: If tech stocks continue to rise, it could stimulate a broader market recovery, with investors closely monitoring upcoming economic data and corporate earnings reports to assess the potential for sustained market growth.
See More
CrowdStrike Q4 Earnings Outlook Amid AI Pressure
- Earnings Expectations: CrowdStrike anticipates Q4 revenue of $1.30 billion, a 22% increase from $1.06 billion last year, indicating strong growth despite an expected drop in earnings per share from $1.03 to $0.74, reflecting pressures from AI tools.
- Expert Insights: Jay Woods, Chief Market Strategist at Freedom Capital Markets, highlights that CrowdStrike's year-to-date stock decline is primarily due to AI disruption trades, urging investors to focus on annual recurring revenue trends to assess customer renewal and product value.
- Analyst Rating Change: Piper Sandler analyst Rob Owens upgraded CrowdStrike from Neutral to Overweight with a price target of $520, arguing that the market's AI concerns are an overreaction and emphasizing that recent acquisitions will enhance the company's competitive edge.
- Price Volatility Outlook: CrowdStrike shares rose 2.9% to $382.85 on Monday, despite a 15% year-to-date decline in 2026; analysts expect volatility post-earnings, with potential retests around the $420 downtrend area.
See More
CrowdStrike and Eli Lilly Options Trading Active
- CrowdStrike Options Volume: As of now, CrowdStrike Holdings Inc (CRWD) options have reached a trading volume of 25,887 contracts, equivalent to approximately 2.6 million shares, representing a significant 53.7% of its average daily trading volume over the past month, indicating strong market interest in the stock.
- High Strike Options Activity: Within CRWD, the $400 strike call option has been particularly active, with 1,316 contracts traded today, representing about 131,600 underlying shares, reflecting investor expectations for future price increases.
- Eli Lilly Options Volume: Concurrently, Eli Lilly (LLY) options have shown a trading volume of 19,886 contracts, approximately 2.0 million shares, accounting for 52.5% of its average daily trading volume over the past month, highlighting the stock's market activity.
- High Strike Options Focus: For LLY, the $1100 strike call option has also been notably active, with 1,461 contracts traded today, representing around 146,100 shares, indicating optimistic sentiment among investors regarding the stock's future performance.
See More
Market Recap: Oil Prices Surge, CrowdStrike Upgraded
- Market Volatility: The S&P 500 fell on Monday but briefly rebounded after the U.S. and Israel launched an attack on Iran, causing oil prices to spike; WTI crude prices, while off their highs, indicate a defensive market stance.
- CrowdStrike Upgrade: Piper Sandler upgraded CrowdStrike from hold to buy with a $520 price target, arguing that the nearly 19% year-to-date pullback is excessive, and sees AI as an opportunity rather than a threat, boosting market confidence.
- Nvidia Strategic Investments: Nvidia shares rose over 3% after being named a top pick by Morgan Stanley, with analysts noting that despite stagnant stock performance in the last two quarters, business has strengthened; the company announced $2 billion investments in both Coherent and Lumentum, highlighting its strategic focus in optics technology.
- Investor Recommendations: Jim Cramer advised investors without Nvidia positions to buy the stock, asserting that its current depressed price won't last long, even as Monday's gains still left shares lower year-to-date.
See More
