Wall Street is touting one of our long-held views: AI is a tailwind, not a headwind, for CrowdStrike and cybersecurity stocks. CrowdStrike stock rose 1.6% on Monday following bullish calls from analysts. While Mizuho rates the stock from neutral to outperform, it raised its price target from $490 to $520, saying recent channel checks showed “very healthy demand” across its platforms and that CrowdStrike has “arguably the strongest product set” in AI security. Separately, JPMorgan highlighted CrowdStrike and Palo Alto Networks as “clear beneficiaries” of the accelerating threat landscape tied to underlying models and agent AI. The company said platform vendors with proprietary data and deep domain expertise are well-positioned to protect enterprises as AI expands the scope of threats across identity and cloud environments. The club owns CrowdStrike and Palo Alto Networks, but has a rating of 3 on the latter, meaning it wants to sell its stake and strengthen itself. Jim Cramer decides he only needs one cybersecurity name in his portfolio and wants to make room for another. We sold some of our Palo Alto stock on Monday. CrowdStrike has a rating of 1. The positive note is important because CrowdStrike and Palo Alto have been caught in a broader sell-off in software stocks this year due to concerns that AI will steal market share. The pair makes up more than 10% of the IGV Tech Software ETF, which is set to fall 20% in 2026. But the recent rally in stock prices suggests that investors are starting to realize the opposite: More powerful AI systems require more security. CrowdStrike stock has risen more than 22% over the past month, but is still down 3.3% since the beginning of the year. Palo Alto’s stock has also rebounded over the same period, rising nearly 24%, but is down 1% for the year. CRWD YTD Mountain CRWD Stock Performance YTD. “What I really like about CrowdStrike is that they are trying and potentially trying to break away from IGV, which is a big problem for them,” Jim Cramer said during Monday morning’s meeting. When the stock was below $400 earlier this year, Cramer predicted that AI would benefit CrowdStrike. That’s why we remained bullish despite the stock price being punished. More analysts on Wall Street are starting to promote that idea. Mizuho pointed to several company-specific benefits, including Falcon Flex, a subscription product for enterprise customers that provides easy access to CrowdStrike’s cybersecurity tools. Analysts also highlighted that demand momentum from hyperscalers and emerging AI security initiatives could exceed CrowdStrike’s 2027 annual recurring revenue target. Another key catalyst is Project Glasswing, Anthropic’s cybersecurity coalition built around the unreleased Claude Mythos model. CrowdStrike and Palo Alto are the only two pure cybersecurity companies named as partners, which Mizuho said is “a true testament to both platforms.” The company added that there is “legitimate potential for Project Glasswing to foster positive and progressive business activity for CRWD over time.” Analysts also said the stock’s valuation has become more attractive after multiple compressions in the past six months. “There’s a sense that there’s something about Anthropic that makes them (CrowdStrike) unnecessary,” Jim said. “It’s the opposite, humanity needs them.” CrowdStrike CEO George Kurtz made a similar claim regarding “Mad Money” after the Mythos announcement. “You can’t deploy AI without security,” Kurtz said, adding, “We are the experts.” Kurtz explained that one of the obstacles to AI adoption is AI securitization, which is why CrowdStrike was chosen as part of the solution for the Mythos partnership. “Security will accelerate the deployment of AI,” Kurtz said. He explained that advanced AI will make security vulnerabilities more accessible, increasing the volume of attacks and reducing the time to respond to them. Kurz continued that finding vulnerabilities and protecting against breaches are very different. Customers don’t just pay to discover vulnerabilities, they pay for the outcome of not being compromised, and CrowdStrike provides that security end-to-end. (Jim Cramer’s Charitable Trust is long CRWD, PANW. See here for a complete list of stocks.) As a subscriber to Jim Cramer’s CNBC Investment Club, you will receive trade alerts before Jim makes a trade. After Jim sends a trade alert, he waits 45 minutes before buying or selling stocks in his charitable trust’s portfolio. If Jim talks about a stock on CNBC TV, he will issue a trade alert and then wait 72 hours before executing the trade. The above investment club information is subject to our Terms of Use and Privacy Policy, along with our disclaimer. No fiduciary duties or obligations exist or arise from your receipt of information provided in connection with the Investment Club. No specific results or benefits are guaranteed.
