Last year, Ark Investment Management CEO Cathie Wood said that software companies will be the next big opportunity in artificial intelligence (AI), predicting that they will eventually generate $8 in revenue for every $1 spent on chips from leading vendors such as Nvidia.
Ark operates several funds (both private and publicly traded) that reflect that view. Through the Ark Venture Fund, Wood has invested in private AI software companies like OpenAI, Anthropic, and Elon Musk’s xAI. Plus, Tesla is the largest holding company in the flagship Ark Innovation ETFwhich Wood says is the world’s biggest AI opportunity thanks to self-driving car software.
If Wood is right about AI software, there could be a long list of winners in the coming years. Here’s why CrowdStrike (NASDAQ: CRWD) And Meta platforms (NASDAQ: META) are perhaps two of the largest.
1. CrowdStrike: A Leader in AI-Driven Cybersecurity
CrowdStrike is one of the best cybersecurity companies in the world. In fact, its shares only need to rise 14% to surpass the $104 billion valuation of the current market leader, Palo Alto NetworksCrowdStrike’s success is due to its unique, lightweight security architecture and reliance on AI to autonomously mitigate attacks.
CrowdStrike’s AI models make more than 180 million indicator-of-attack decisions every second. In other words, they’re constantly analyzing the motive and intent of attackers to determine what kind of threat they pose. These models are trained on more than 2 trillion security events every day, and that number is growing as more customers join CrowdStrike, increasing the company’s AI advantage over its competitors.
It all happens in the cloud. By using CrowdStrike, companies don’t have to install bulky programs on every device in their organization. Instead, they install a lightweight sensor connected to the cloud that takes up minimal processing power compared to traditional cybersecurity software.
CrowdStrike has taken a platform approach to cybersecurity since its founding, which stands in contrast to industry norms where different vendors specialize in specific segments like cloud security, identity protection, and endpoint security. CrowdStrike covers all the bases through its 28 modules, and while not every business needs the full suite, 65% of customers were using five or more modules in the recent fiscal first quarter of 2025 (ended April 30).
According to a CrowdStrike-sponsored study by International Data Corporation, companies can save $6 for every $1 they invest in consolidating their cybersecurity needs onto a single platform. Therefore, not only do they get the best protection, but switching to CrowdStrike is a no-brainer financially.
CrowdStrike ended Q1 with a record $3.6 billion in annual recurring revenue, but management believes that figure will grow 177% to $10 billion within the next five to seven years. That estimate may even be conservative given how quickly AI is advancing, which will not only enhance CrowdStrike’s protective capabilities but also create new threats that will drive increased cybersecurity spending in the enterprise sector.
2. Meta Platforms: A social media giant turned AI developer
Meta Platforms is home to leading social networks like Facebook, Instagram, and WhatsApp, which serve 3.2 billion people every day. The company already uses AI to curate each user’s content feeds across Facebook and Instagram to ensure they see the posts that are most relevant to them. Last year, this led to an increase in engagement across both platforms, giving Meta more opportunities to generate ad revenue.
But the company may have an even bigger AI opportunity in its large language model (LLM) called Llama. It’s the world’s largest open-source model, so developers can use it for free to build their own AI applications, allowing Meta to crowdsource its testing to make improvements faster. That’s important because Llama is key to creating new AI features for Meta’s existing platforms.
Last year, for example, the company launched a chatbot called Meta AI that users can reach out to on Facebook, Instagram, Messenger and WhatsApp. It can answer complex questions and generate images like most chatbots, but can also be added to group chats to make restaurant and travel recommendations, or even offer gift ideas. Meta AI is currently powered by Llama 3, but the company is already training its next-generation model, which should offer even better capabilities.
Ultimately, every business using Meta’s apps could have its own personalized Meta AI-style chatbot that can handle incoming customer queries and potentially even process sales. That should open up new revenue opportunities for Meta.
Here’s the best thing about Meta stock: It’s cheap. Based on the company’s $17.41 earnings per share over the last 12 months, it’s trading at a price-to-earnings (P/E) ratio of 28.9. That’s a 9.4% discount to the company’s P/E ratio of 31.9. Nasdaq-100 Table of contents.
Wall Street expects Meta to generate earnings of $21.59 in 2025, which puts its forward price-to-earnings ratio at just 23.3. That means Meta shares would need to rise 36.9% by the end of next year to stay in line with the broader tech sector.
If Cathie Wood is right about AI software, then Meta shares could be an even better buy than the numbers above suggest. Entirely new opportunities for AI monetization could open up as this story unfolds.
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Randi Zuckerberg, former chief marketer and spokeswoman for Facebook and sister of Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends CrowdStrike, Meta Platforms, Nvidia, Palo Alto Networks and Tesla. The Motley Fool has a disclosure policy.
Cathie Wood Says Software Is the Next Big Opportunity for AI — 2 Supercharged Stocks You’ll Regret Not Buying If She’s Right was originally published by The Motley Fool
