CRWD Stock: Can CrowdStrike Reinvent Cybersecurity?

CrowdStrike Holdings [CRWD] sells cloud-based cybersecurity subscriptions to corporations and governments. The company also provides advisory, forensic and breach recovery professional services.

The Falcon platform is CrowdStrike’s flagship security solution. It uses data analytics and artificial intelligence (AI) to analyze risk, detect threats and protect computer systems from malware and identity-based attacks.

This stock spotlight will discuss the latest developments, earnings, market performance and bull/bear cases for the CRWD stock.

AI Innovation and Regulator Scrutiny 

In 2025, CrowdStrike rapidly expanded its suite of AI cybersecurity solutions to include the extension of protection to third-party data, a new security detection feature to enable faster security response, real-time visibility of AI usage across company operations, and tools to assess “AI readiness” of corporate systems.

“As organizations adopt LLMs (large language models), copilots and agentic tools, they face a rapidly expanding attack surface with new risks such as shadow AI, misconfigurations and autonomous agents acting as non-human identities operating with privileged access”, CrowdStrike said in an August release, adding that, in parallel, “adversaries are using AI to automate reconnaissance, generate highly effective phishing content and bypass traditional defenses”.

The company also integrated its security solutions with ChatGPT Enterprise and Amazon [AMZN] Web Services (AWS) to allow customers to monitor, govern and protect AI agents and generative AI systems.  

In August, the company released a solution designed to prevent identity-driven breaches. 

According to the company, over 70% of attacks in 2024 were non-malware attacks, while eight out of 10 breaches were the result of compromised or stolen credentials.

In other news, Bloomberg reported in May that US prosecutors and regulators are investigating a $32m deal between CrowdStrike and technology distributor Carahsoft Technology, signed in 2023 to supply cybersecurity software to the Internal Revenue Service (IRS).

According to the report, CrowdStrike had previously said that Carahsoft made on-time payments for the order, but the IRS never purchased or received the products.

CrowdStrike announced its Q2 fiscal 2026 earnings on August 27, reporting record new ARR of $221m and total ARR growth of 20% year-over-year to $4.66bn. It announced total revenue of $1.17bn, an increase of 21% compared to $963.9m in Q2 fiscal 2025.

Subscription revenue climbed to $1.10bn, a 20% rise year-over-year from $918.3m. Non-GAAP income from operations came in at $255m, compared to $241.1m in Q2 2025. The company also highlighted record Q2 cash flow from operations of $333m and record Q2 free cash flow of $284m. 

CRWD Stock Performance

CRWD’s share price has risen by over 56% over the past year, as of August 27, on the back of strong revenue growth and AI product launches. 

In comparison, the tech-heavy Nasdaq Composite index has gained over 21% while the US equity benchmark S&P 500 index has increased more than 15% in the same period.

On July 3, CrowdStrike hit an all-time high of $517.98. At the time of writing, CRWD stock was trading at $422.61, 18.4% below its record price.

In year-to-date terms, the CRWD share price is up by 23.5%.

Rival cybersecurity firms have mirrored CRWD’s stock price surge in 2025, with Cloudflare [NET] up 90.61% year-to-date and Zscaler [ZS] increasing by 51.36% year-to-date. 

Shares of bigger rival Palo Alto Networks [PANW] underperformed the competition, gaining only 3.11% year-to-date in 2025.

Comparing CrowdStrike [CRWD], Palo Alto Networks [PANW] and Cloudflare [NET]

Palo Alto Networks is a cybersecurity vendor that provides firewalls, AI runtime security and cloud-delivered security services. The company is a direct competitor to CrowdStrike.

Cloudflare is a cloud-based internet security and performance company. It provides services for content delivery, internet upkeep, data protection and identity security, among others. 

CRWD Stock: The Investment Case

Bull Case for CRWD Stock: Plans to hit $10bn ARR With AI

CrowdStrike says it is reinventing cybersecurity for the cloud and AI era.

The company’s flagship Falcon platform has already introduced AI-powered solutions for identity protection, agentic AI monitoring and accelerated threat detection.

In the Q1 earnings report, CEO George Kurtz revealed that the Falcon platform was seeing 97% of its customers renew subscriptions, making it the “cybersecurity platform of choice for the agentic AI era”.

Moreover, the Falcon platform’s single data model and open cloud architecture are expected to allow CrowdStrike to expand into new markets outside of security, such as application license management, AWS spend analysis and asset inventory.

In May, the company outlined a strategic plan to reach $10bn in annual recurring revenue. As part of this push, the company reduced its workforce by 5% to assist with “doubling down on our highest-impact opportunities”.

“As enterprises undergo digital transformations and cloud migrations, we foresee endpoint security further gaining wallet share of an enterprise’s security spend. Within this growing market, CrowdStrike has emerged as a leader and we think the stickiness of its platform, Falcon, is clear in the firm’s impressive gross and net retention metrics,” said Malik Ahmed Khan, an equity analyst for Morningstar, in a report earlier this year.

Bear Case for CrowdStrike: 2024 IT Outage Haunts Company

On July 19, 2024, a software issue at CrowdStrike led to a global IT outage, disrupting 8.5 million Windows devices and grounding flights worldwide, in what was described as the worst cyber event in history by the media. 

CrowdStrike was forced to cut its revenue and profit forecasts following the outage. According to the company, the July 19 incident adversely affected its customer relationships and resulted in longer sales cycles.

In May, a US court ruled that Delta Air Lines [DAL] can pursue a lawsuit against CrowdStrike for the computer outage that led to the cancellation of 7,000 flights. The company was also slapped with a consumer class action suit from airline passengers who experienced flight disruptions.

Other risks include CrowdStrike’s valuation premium, with the stock trading at a price-to-sales ratio of 24.86, compared to rival Palo Alto Networks’ 14.17, which leaves little margin for error. 

Meanwhile, competition is set to intensify after Palo Alto Networks entered the identity security market following its acquisition of CyberArk in July.

Conclusion

CrowdStrike is going all-in on AI to deliver automated protection and accelerated threat responses to customers. Despite the global IT outage suffered last year, the company has sustained revenue growth. However, premium valuation, legal challenges and intensifying competition present risks.