We're buying more of this name unfairly pulled into the software stock sell-off
We are buying 10 shares of CrowdStrike at roughly $417. Following the trade, Jim Cramer’s Charitable Trust will own 255 shares of CRWD, increasing its weighting to about 2.75% from 2.6%. Software stocks are getting slammed on Tuesday amid fears that AI products from companies like Anthropic will eat into the market share of traditional enterprise software-as-a-service (SaaS) companies. It’s not a new thesis, but it’s one that has picked up steam over the past few months following the release of Anthropic’s Claude Opus 4.5, which the company said was the “best model in the world for coding, agents, and computer use” and can help users with complex enterprise tasks. Software stocks have been hated for months, but the sell-off accelerated on Tuesday after Anthropic released a new automation tool for legal work. This ongoing concern is causing investors to rush for the exit on their software stocks, as Bloomberg reported today. We believe AI’s threats to software are valid and something we must be mindful of. Any stumble by enterprise software companies this earnings season will make the “AI is eating software” argument even louder. We’re not here to defend the entire software sector. Our only issue with these types of sector sell-offs is that they bring down the shares of good companies alongside those of bad ones. Companies with a low risk of AI displacement are being lumped together with firms that may face genuine disruption. For example, take a look at the i Shares Expanded Tech-Software Sector ETF . Several companies in this basket will face significant disruption from AI, but other top positions — including Microsoft, Palantir , Palo Alto , and CrowdStrike — are likely to keep thriving. A lot of this relates to what we call the ETF-ization of the market: Many investors prefer to trade ETFs instead of individual stocks, leading to forced selling of holdings that may not be justified. One group unfairly punished is the best-of-breed cybersecurity companies. And as we discussed last week, it’s the only one in software we’re willing to nibble on. We view AI as a tailwind to their businesses — not a destroyer — because it makes bad actors even more sophisticated, creating a greater need for premier cybersecurity solutions. That’s why we are taking advantage of this sector dive by picking up more shares of CrowdStrike, which are down about 24% from their November high of $557. With this purchase, we’re also buying back the 10 shares we sold back in June at around $487. (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
