CrowdStrike's stock price drops 11% after software blunder leading to global IT outage
From Nasdaq: 2024-07-21 06:10:00
CrowdStrike’s stock price plummeted 11% after an update to its cloud-based cybersecurity platform caused a global IT outage affecting banks, airports, hospitals, retailers, and government agencies. CEO George Kurtz blamed a defect in a content update for Windows hosts. The incident raises questions about CrowdStrike’s long-term growth and market position amidst fierce competition.
CrowdStrike’s cloud-native platform, Falcon, has enabled the company to grow rapidly since its IPO, with revenue soaring at a CAGR of 65%. However, the recent outage highlights the risks of widespread adoption of cloud-based platforms. Despite robust growth in ending ARR and total revenue, CrowdStrike faces challenges in retaining customers post-incident.
CrowdStrike’s recent software blunder may drive customers to consider competitors like Palo Alto Networks, with a more diversified mix of on-site and cloud-based services. While CrowdStrike expected 30%-31% revenue growth in fiscal 2025, the incident and potential lawsuits could impact long-term prospects. Elon Musk’s Tesla has already “deleted CrowdStrike” from all systems.
Microsoft’s own cloud-based cybersecurity platform could benefit from CrowdStrike’s misstep, leading to increased investment and development to reduce reliance on third-party platforms. While some see the stock’s pullback as a buying opportunity, concerns remain about the long-term impact of the outage and CrowdStrike’s ability to retain customers in the face of competition.
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Read more at Nasdaq: Is CrowdStrike’s Big Blunder a Buying Opportunity?