CrowdStrike Bulls Beware: This Trade May Be Getting Crowded

Key Points

• Several analysts have downgraded CrowdStrike stock after earnings, citing stretched valuations despite long-term growth potential.
• The rise of AI threats makes cybersecurity spending essential, supporting CrowdStrike’s robust revenue outlook.
• The CRWD stock shows a bearish MACD crossover and resistance near $520 that suggest a healthy pullback after a year-long rally.

Cybersecurity stocks are on fire in 2025, and CrowdStrike Holdings Inc. NASDAQ: CRWD has been one of the tech stocks leading the charge. After the notorious outing caused by a software glitch in summer 2024, CrowdStrike has come roaring back and has been making new all-time highs just one year later.

But the stock is down about 1.8% in the last month, and it’s at a crossroads in which the bears may have the upper hand. However, this doesn’t appear to be anything but a garden variety correction in the making.

Even good stocks need to take a breather before making another move higher. Here’s why long-term investors in CRWD stock may want to have some cash on the sidelines for a buy-the-dip opportunity.

Analysts Are Mixed on CRWD Stock

In the six weeks following CrowdStrike’s earnings report on June 3, several analysts have downgraded or reiterated Hold ratings on CRWD stock. These include:

• Piper Sandler (Overweight → Neutral)

• Sanford Bernstein (Outperform → Market Perform)

• Morgan Stanley (Overweight → Equal Weight)

Both Piper Sandler and Morgan Stanley NYSE: MS have price targets above the consensus price of $456.40 ($505 and $495, respectively). Bernstein, however, reaffirmed its price target of $361, one of the lowest targets for the stock.

On the other hand, analysts from The Goldman Sachs Group Inc. NYSE: GS, Stifel Nicolaus, and Jeffries have raised their respective price targets for CRWD stock.

• Goldman Sachs ($389 → $530, +14% upside)

• Stifel Nicolaus ($480 → $495)

• Jefferies ($410 → $520)

The Bernstein price target looks like the clear outlier. The rest of the analysts don’t contradict a long-term bull case. But they support the idea that valuation has run ahead of growth expectations in the next few months.

The Case for Cybersecurity Is Only Getting Stronger

Many of today’s digitally native investors have “grown up with” cybersecurity, but it remains a relatively young industry that emerged after the dot-com bubble in the late 1990s and early 2000s. The need expanded quickly as the Internet 2.0 introduced payment processing, which took threats beyond e-mail.

Since history rhymes, many investors may notice that artificial intelligence (AI) gives cybersecurity a dot-com feel. AI is transforming businesses and the nature of online threats, making cybersecurity a must-have expense and likely to keep growing as AI becomes mainstream.

CrowdStrike will likely continue its leadership in the space due to the breadth of its Falcon platform. It’s one of the first cloud-native cybersecurity platforms. Plus, the platform can be sold on an à la carte basis. Customers can buy the services they need today and add on as their needs change.

The company used its business model to increase revenue following last summer’s outage. It offered customers the opportunity to test-drive some Falcon modules free of charge.

As these goodwill offerings expire this year, the company forecasts that many customers will continue to pay for the modules. Since these modules contribute to the company’s high gross margins, investors should expect strong cash flow.

The CRWD Chart Supports the Idea of a Correction

In the last 12 months, CRWD stock has climbed from $240 to over $500, a gain of over 100%. However, the recent downturn has pushed the price near its 50-day simple moving average (SMA). This could be an area of support. However, if it fails to hold that level, the next level of support could be around the $421 to $430 area.

Perhaps more problematic is an area of resistance between $510 and $520, which means the stock is unlikely to make new all-time highs before the company's earnings report in August. However, a bearish MACD crossover supports the idea of a pullback.

That said, the longer-term trend lines are still intact, which tells the same story as analyst ratings. This is a healthy pause rather than a fundamental weakness.