CrowdStrike Holdings can buck Microsoft's push into the cybersecurity market, says an analyst who initiated coverage of CRWD stock with an outperform rating. CrowdStrike stock moved higher early Wednesday but closed down as the Nasdaq sold off.
"We believe that CrowdStrike offers best-in-class endpoint security capabilities and an expanding platform that will help CrowdStrike compete against Microsoft and other vendors," BMO Capital Markets analyst Keith Bachman said in a note to clients Tuesday.
Meanwhile, Microsoft is leveraging its cloud computing unit as well as selling multiple cybersecurity products to companies in discounted deals. Also, Microsoft on Wednesday said it would lay off 10,000 workers in the latest round of tech companies downsizing.
CrowdStrike Chief Executive George Kurtz, in a recent interview with IBD, talked about the evolving cybersecurity market. Kurtz addressed the Microsoft threat.
"There's a lot of competition in the cybersecurity space, whether it's from Microsoft or others. And I think what customers are focused on is getting the best outcome for the best bang for the buck," Kurtz said. "We empirically can show that when we think about Microsoft, they are busy with other things like their cloud business and applications. And many of the incident responses that we actually help customers recover from are based on failures in Microsoft technology."
CRWD Stock: Broad Cybersecurity Platform
Sunnyvale, Calif.-based CrowdStrike uses machine learning, one form of artificial intelligence, in its products. It also uses a specialized database to detect malware on laptops, mobile phones and other devices that access corporate networks.
Kurtz described how cybersecurity needs could help CrowdStrike weather the economic storms that loom for 2023.
"I think it's incredibly important when you look at the corporate hierarchy of needs. (Cybersecurity is) equivalent to shelter. It has to be in place," Kurtz said. "There's regulatory requirements, there's business resiliency requirements. So security is, from my perspective, a very resilient industry."
Broad Platform In The Works
CrowdStrike is building a broad, threat-detection cybersecurity platform. Called XDR, or extended detection and response, it monitors endpoints as well as web/email gateways, web application firewalls and cloud business workloads.
"We envision CrowdStrike continuing to expand its portfolio and becoming a leading security provider, with endpoint security as a key offering," added Bachman. "We continue to believe that CY23 security budgets will be more resilient than other parts of IT, though not immune from a weak macro."
CRWD stock fell 3.3% to close at 101 on the stock market today.
According to IBD Stock Checkup, CrowdStrike stock holds a Relative Strength Rating of only 7 out of a best-possible 99. Further, CRWD stock is one of many cybersecurity companies to watch.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
