CrowdStrike experienced a technology outage due to a faulty update, causing a 10% drop in shares.

From Morningstar: 2024-07-19 11:09:00

CrowdStrike revealed that a faulty update caused a technology outage affecting millions of users on July 19. Customers using the security platform were locked out of their Windows devices. The company emphasized it wasn’t a security breach and quickly rectified the issue, allowing affected operations to resume within hours.

Investors reacted by selling CrowdStrike’s shares, causing a more than 10% drop. Despite the market’s response, the update didn’t compromise the company’s security apparatus. This pullback presents a good buying opportunity for long-term investors seeking high-quality security/software exposure. The stock remains in 3-star territory post-drop.

The faulty update causing chaos this morning is suspected to have originated from CrowdStrike’s central cloud, which simultaneously updates the entire customer base. While this feature enables continuous security updates, it also allowed a flawed update to disrupt operations at major airports and media networks. A detailed postmortem of the incident is pending.



Read more at Morningstar: CrowdStrike Sell-Off a Buying Opportunity After Outage