Cloud Software's Golden Age: How Tax Reforms and Tariffs Are Fueling Growth at Okta, Autodesk, and CrowdStrike

The global trade landscape has shifted dramatically in 2025, with tariffs now averaging 17.6% on U.S. imports and the Biden administration's "One Big Beautiful Bill Act" reshaping corporate tax incentives. For software companies like Okta (OKTA), Autodesk, and CrowdStrike (CRWD), this environment is anything but hostile—it's a goldmine.

The Tariff-Driven IT Spending Shift

The 2025 tax law and aggressive tariff policies have created a structural shift in enterprise IT spending. Companies are now under pressure to reduce reliance on foreign-sourced hardware and services, driving demand for domestic cloud-based software solutions. This is where the trio excels.

Morgan Stanley recently highlighted these three as "winners" in its analysis, noting that the tax law shields software stocks from tariff volatility while boosting profitability. The firm emphasized that Okta, Autodesk, and CrowdStrike are "sheltered" by provisions reducing R&D costs, incentivizing domestic innovation, and exempting cloud services from import duties.

Why the Tax Law Matters: Three Key Provisions

1. R&D Tax Credits: The law allows immediate expensing of domestic research costs, slashing expenses for AI and cloud development.
   
2. FDDEI Reforms: A 33.34% deduction for income tied to foreign sales, making U.S.-based software exports more competitive.
3. Manufacturing Breaks: Full expensing for cloud infrastructure investments, lowering costs for companies scaling data centers.

These provisions are fueling margin expansion. CrowdStrike, for example, saw its gross margin rise to 78% in 2024 from 69% in 2020, as the tax law reduced its effective rate.

Case Study: CrowdStrike – The Cybersecurity Darling

• AWS Marketplace Milestone: CrowdStrike hit $1B in annual sales via AWS, a first for a cybersecurity ISV. Its AI-native Falcon Platform is now FedRAMP-certified, enabling federal contracts.
• Global Reach: Partnerships with Oracle Cloud and Orange Cyberdefense expanded its hybrid-cloud offerings, ideal for enterprises seeking tariff-protected solutions.
• Analyst Buzz: Stifel raised its price target to $475, citing "irreversible momentum" from AI-driven demand.

The tax law's R&D incentives have allowed CrowdStrike to outspend rivals like Palo Alto Networks (PANW) on innovation, widening its moat.

Case Study: Okta – The Identity Management Leader

• AI-Driven Innovation: Its Cross App Access protocol secures AI agents in enterprises, addressing a $20B+ market.
• Enterprise Adoption: Backlog surpassed $4.08B, signaling long-term contracts with Fortune 500 firms.
• Margin Boost: The tax law's R&D breaks helped Okta reduce its operating expenses by 12% in 2024.

Analysts like Oppenheimer see Okta as "oversold" at current levels, with upside to $135.

Case Study: Autodesk – The Quiet SaaS Powerhouse

While less headline-grabbing, Autodesk benefits from the tax law's SaaS-friendly structure:
- Subscription Growth: Cloud-based tools like Autodesk Construction Cloud now account for 92% of revenue, up from 85% in 2020.
- Global Tax Efficiency: The FDDEI deduction lowers its tax rate on foreign sales, which make up 40% of its business.

The firm's quiet execution contrasts with its peers' volatility, making it a "buy-and-hold" play for investors.

Risks and Opportunities

• Near-Term Volatility: The DOJ's probe into CrowdStrike's $32M Carahsoft deal poses a risk, but long-term demand for its AI tools remains unshaken.
• Trade Policy Uncertainty: A delay in tariff deadlines to August 2025 has eased pressure, but geopolitical risks persist.

Conclusion: Buy the Cloud, Sell the Tariffs

The 2025 tax law and tariff regime are rewriting the rules of enterprise IT. Okta, Autodesk, and CrowdStrike are uniquely positioned to capitalize:
- Defensive: Shielded from import duties and geopolitical shocks.
- High-Growth: AI-driven products and tax-fueled margins are supercharging their trajectories.

Investment Thesis:
- Okta: Buy below $95, targeting $130+ on backlog-driven revenue.
- CrowdStrike: Accumulate dips below $350, aiming for $500+ on AI adoption.
- Autodesk: Hold for the long term at $330, leveraging its SaaS dominance.

In a world of trade wars, these three stocks are the safest bets for tech investors.