Equity Mates Investing Podcast · Equity Mates Media

4 steps to find winning software stocks with Ben Arnold

·43 min·2 clips

Ben says software is safer when its value rests on proprietary data, not easily scraped public data.

AI is the doorway. Bryce sets up Ben Arnold from Schroders with a broad question about global investing opportunities, then the chat moves fast to the top end of town. Big tech is part of it, sure, but Ben is more interested in the plumbing. A software company starts to look exposed if its value sits on public data that a large language model can scrape. Proprietary data gives it a better shot. If everyone can reach the same information, AI can turn the product into a commodity pretty quickly. Then comes error tolerance, which is where the discussion gets more useful. Ben separates an AI-generated video, where a slightly wrong result can still be handy, from software where a small mistake gets expensive. The clothing-line example keeps it casual: an average AI video might still give Bryce, Ren, and Ben something worth chasing. Accounting software is less forgiving. If a tax return is mostly right, the ATO or IRS is still going to care about the wrong number. Drug development, trials, and structural engineering sit even further down that road. That does not make every software business safe. It gives investors better questions. Can customers live with small failures? Would they actually switch if a shinier AI tool appeared? Are there government-mandated barriers in the way? In Ben's framing, the tougher software names have defensible data, low room for error, customer friction, and regulation working in their favour.

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