KEY TAKEAWAYS
- CrowdStrike shares are falling more than 4% in premarket trading, extending Friday’s large declines, after the cybersecurity firm’s software update caused a global outage in Microsoft’s cloud services.
- Meanwhile, shares of CrowdStrike’s rivals Palo Alto Networks and SentinelOne are extending their gains.
- Deutsche Bank analysts said CrowdStrike’s competitors “will look to seize on CrowdStrike’s misfortune.”
CrowdStrike (CRWD) shares are falling more than 4% less than an hour before the opening bell Monday, extending Friday’s 11% declines, after an update to the cybersecurity firm’s software caused an outage in Microsoft’s (MSFT) cloud services and disrupted businesses worldwide.
Meanwhile, the shares of CrowdStrike competitors Palo Alto Networks (PANW) and SentinelOne (S), which rose Friday in the wake of the outage, continued their gains in premarket trading. SentinelOne shares are up about 5% and Palo Alto Networks 1%.
Rivals ‘Will Look to Seize on CrowdStrike’s Misfortune’
In a note Monday, Deutsche Bank analysts said that CrowdStrike shares face a “non-trivial downside risk” given that it’s a “premium company” whose stock trades at 15 times 2025 revenue.
“No doubt competitors like SentinelOne, Microsoft, and even Palo Alto Networks will look to seize on CrowdStrike’s misfortune,” they said.
CrowdStrike short sellers made more than $373 million Friday after the cybersecurity firm’s stock plunged, according to research firm S3 Partners.
Despite their recent declines, CrowdStrike shares are up almost 20% this year through Friday’s close. CrowdStrike provides security software to customers and apart from Microsoft Azure, its cloud platform partners include Alphabet’s (GOOGL) Google Cloud, and Amazon’s (AMZN) Amazon Web Services (AWS).