CrowdStrike at a Crossroads: AI Halo vs. Risks

Key Points

• CrowdStrike delivered 21% YOY revenue growth and strong ARR gains.
• Subscription revenue will lag ARR by $10–15M per quarter through FY2026.
• CRWD trades below its 50-day SMA, with $400 as key support if momentum fades.

CrowdStrike Holdings, Inc. NASDAQ: CRWD delivered a strong second-quarter earnings report for its fiscal year 2026. However, much like that of NVIDIA, the market sent CRWD stock tumbling in after-hours trading. But the bulls came back in full force at the open of trading, sending the stock up approximately 2%.

The question will be whether the bounce is setting a floor from the stock’s recent slide, or if it’s the beginning of a bullish reversal that could send the stock to a new all-time high. There are reasons that investors in both camps could latch onto.

The headline numbers were solid with revenue of $1.17 billion clocking in 21% higher on a year-over-year (YOY) basis. Earnings per share (EPS) of 93 cents were 10 cents higher than the consensus estimate. However, that was about 10% lower YOY.

Strong ARR Highlights Strong Adoption and Retention

For cybersecurity companies, like other software-as-a-service (SaaS) companies, annual recurring revenue (ARR) is the key measure of growth. CrowdStrike delivered ARR of $4.6 billion for the quarter, a 20% YOY increase. That highlights the stickiness of the company’s Falcon platform.

It also registered $221 million in new ARR. This may be more meaningful for investors because it shows the company is not only adding customers, but those customers are adding modules in the Falcon platform.

The initial post-earnings dip in CRWD stock may have been due to a technical wrinkle that management noted regarding how ARR will flow into subscription revenue. CrowdStrike adopted a Customer Commitment Program (CCP) in 2024 after the widely publicized outage after a software update. This allowed current customers to “test drive” additional Falcon modules.

However, the success of that, and related programs, will create a $10 million to $15 million separation between ARR growth and reported subscription revenue for the remainder of its current fiscal year. CrowdStrike expects this to normalize in FY2027. The takeaway for investors is that demand remains strong, but it will take several quarters before subscription revenue fully reflects that momentum.

Is an AI Halo Lifting CRWD Stock?

CrowdStrike reported right before NVIDIA delivered its earnings report. Both stocks dropped despite strong reports. However, both stocks are moving higher in early trading as investors get a chance to fully digest the report.

Technology stocks, particularly those in the AI sector, tend to move in sympathy. CrowdStrike has increasingly been grouped into the “AI beneficiary” trade as investors look for cybersecurity firms positioned to leverage machine learning at scale.

It’s also because, while AI is bringing many positives, it’s also creating more sophisticated cybersecurity threats. On the earnings call, CrowdStrike chief executive officer (CEO), George Kurtz, remarked, “AI is accelerating every aspect of our society and revolutionizing the way we work, but it's also accelerating the adversary...The adversary never rests...”

CrowdStrike reported right before NVIDIA delivered its earnings report. Both stocks dropped despite strong reports. However, both stocks are moving higher in early trading as investors get a chance to fully digest the report.

The question remains if the company’s earnings report will be strong enough to overcome concerns about valuation. Analyst sentiment has been trending bearish, with at least seven analysts lowering their price targets on CRWD stock after the report.

It's fair to note that most of those targets are above the consensus price of $457.66.

CrowdStrike at an Interesting Crossroads

From a technical perspective, CrowdStrike’s chart reflects the broader tug-of-war between growth enthusiasm and valuation discipline.

CRWD stock is trading at $434.21 as of this writing. That’s well below its 50-day simple moving average (SMA) of $461.73. That gap was in place before earnings and shows how momentum turned against the bulls.

Can the bulls get the momentum back? The MACD is starting to turn positive. However, investors will want to see signs of a sustained increase in volume as a sign of conviction. If that happens, bulls could see the stock break decisively above the 50-day SMA and could put $500 in play by the end of the year.

On the other hand, the bears can point to the stock’s failure to hold that level earlier this month, coupled with valuation concerns that make a sustained rally harder to justify. If momentum fades, the next test could be whether shares can hold support near the $400 level.