5 software names with strong competitive positioning, visible AI leverage, and valuation setups worth tracking 👇

IGV is down 27.5% YTD, Software got hit hard. Valuations compressed.

$NET — Cloudflare | Forward EV/S: 24.05x Cloudflare benefits from AI in a different way than hyperscalers. It runs workloads at the edge through Workers AI and charges for execution, not GPU rental. Management says its design can deliver up to 10x workload efficiency per processing unit versus traditional cloud approaches. AI traffic rising across search, agents, and inference can convert into higher usage without matching capex intensity. Bull thesis: Cloudflare monetizes AI demand through network density and software economics, turning edge inference into a structurally scalable revenue stream.

$AXON — Axon Enterprise | Forward EV/S: 7.9x Axon is using AI to automate one of the most painful workflow bottlenecks in public safety: report writing. Products like Draft One and Axon Assistant convert body cam audio into formal police reports, reducing hours of manual admin work. In Q4 2025, software and services revenue reached $343M inside total revenue of $797M, while adjusted EBITDA hit $206M. Bull thesis: software becomes the profit engine, AI increases workflow stickiness, and law enforcement adoption expands far beyond hardware refresh cycles.

$SHOP — Shopify | Forward EV/S: 9.5x Shopify is embedding AI directly into merchant productivity. Sidekick and Shopify Magic reduce friction for store creation, product content, and back-office operations. In only three weeks, Sidekick generated nearly 4,000 custom apps, created 29,000 automations, and edited over 1.2M product photos. Orders coming from AI search channels have risen 15x since January 2025. Bull thesis: AI lowers the barrier for new merchants and increases operating leverage for existing ones, pushing more GMV and merchant retention into Shopify’s ecosystem.

$CRWD — CrowdStrike | Forward EV/S: 16.2x CrowdStrike is turning AI into a platform multiplier, not a feature. Charlotte AI is being used to automate threat hunting, exposure analysis, and investigation workflows. In fiscal Q4 2026, Charlotte usage increased 6x YoY, and ARR tied to the assistant tripled. Net new ARR hit a record $330.7M, while 50% of subscription customers now use six or more modules. Bull thesis: AI improves analyst productivity, which strengthens platform consolidation, module adoption, and long-term customer value.

$DDOG — Datadog | Forward EV/S: 9.5x Datadog benefits as AI makes infrastructure harder to observe, secure, and optimize. Its Bits AI SRE agent helps enterprises monitor model performance, system reliability, and cost efficiency across AI deployments. In Q4 2025, Datadog posted a record $1.63B in bookings and ended the period with 603 customers generating more than $1M in ARR. It also launched over 400 new features in the last year. Bull thesis: more AI in production creates more telemetry, more complexity, and more need for a unified observability layer.