CrowdStrike is setting the standard for modern cybersecurity, and the stock is having a well-deserved great year. The company is a leader in a highly competitive industry, with rivals such as fellow club name Palo Alto Networks vying for companies’ ever-expanding cyber budgets. Despite Wednesday night’s strong results, Palo Alto stock plummeted in Thursday’s massive market reversal. Nvidia’s post-earnings stock price rally stalled, and with it Wall Street collapsed. CrowdStrike, which had risen sharply in the early part of the session, also started to decline. But this year as a whole, CrowdStrike has expanded its artificial intelligence-powered solutions to protect against cyber-attacks, making it a standout in the market. Including Thursday’s decline, the stock was up more than 45% so far in 2025. Many analysts believe there is significant upside for CrowdStrike going forward, with 65% of analysts rating the stock as a buy with an average price target of $534. The stock’s closing price on Wednesday was $520. One such analyst is Dan Ives, global head of technology research at Wedbush. He told CNBC that his bullish view on CrowdStrike is supported by two unpenetrated areas: securing the AI ecosystem and securing the cloud. “Investors don’t understand the huge wave of demand that’s coming to CrowdStrike,” Ives said in an interview, arguing that Wall Street was “underestimating” what he called the second and third offshoots of the AI revolution. “I don’t believe there’s an AI premium built into the stock.” “CrowdStrike’s AI strategy could ultimately drive the stock up 40% to 50% over the next 12 to 18 months,” Ives said, noting that his bullish CrowdStrike price target of $700 per share reflects much of that upside potential. Ives raised the basic PT to $600 from $525 earlier this month. This represents a more modest 15% premium to Wednesday’s closing price, not far from last week’s all-time high. CRWD 5 Years Mountain CrowdStrike 5 Years CrowdStrike CEO George Kurtz, in the company’s latest post-earnings conference call on Aug. 27, is betting that the next big wave of cybersecurity demand will come from what he calls the “agent revolution.” He said that as AI agents proliferate across enterprises, companies will need new layers of protection to protect how agents interact with sensitive data. In mid-September, at CrowdStrike’s Fal.Con industry conference, Kurtz said the rise of agent AI is “more than a 100x opportunity for CrowdStrike” compared to the company’s earlier market opportunities in cloud and endpoint security. The CEO estimates that a company with 10,000 employees could have 1 million AI agents needing protection, creating a massive new market for cybersecurity. Agentic AI is a type of system that can complete tasks without human supervision. These virtual agents are ideal for enterprises because they can be deployed in bulk at a much lower cost than regular employees. However, each of these AI agents presents a vulnerability that hackers can exploit, leaving businesses at greater risk of cyberattack. To be sure, CrowdStrike’s AI ambitions are still in the early stages. Canaccord Genuity analyst Kingsley Crane told CNBC that implementation will take time. While new agent-based AI “has the potential to be a productivity-enhancing force,” he believes “it will take time for agents to be widely adopted,” he wrote in a Sept. 19 memo after attending Fal.Con. During the conference, CrowdStrike’s management announced bullish short-term and long-term growth targets at the afterbell on September 17th, and the stock price soared nearly 13% the next day to over $502. It’s good to see the stock price rising on these gains. At the time, CrowdStrike said it expected fiscal 2027 net new annual recurring revenue (ARR) to increase more than 20% year over year. ARR is an important metric for judging cyber companies. Management estimates that ARR will reach $10 billion by 2031 and double to $20 billion by 2036, driven by next-generation identity and analytics tools, cloud protection, and growing demand for agent-based AI security. Turning to cloud, Canaccord’s Crane said that at CrowdStrike, cloud is the “fastest growing part of our business,” noting that cloud revenue grew 35% year-over-year last quarter, with total cloud final ARR exceeding $700 million. CrowdStrike already has about 20% to 30% market share in the cloud protection space, but the overall opportunity is huge, Crane said. “Among CrowdStrikes, cloud security has the most potential, unrealized benefits,” he said, estimating the current market size to be in the $17 billion to $20 billion range and grow rapidly as more workloads move online. The opportunity will be built on the foundation of the Falcon platform, which is the core of CrowdStrike’s business model. The company started as an endpoint security provider, installing lightweight agents on devices such as personal computers to collect data about potential threats. That data is fed into the cloud and forms CrowdStrike’s powerful engine for detecting attacks. Over time, the company has used this infrastructure to expand beyond endpoint security by adding modules such as cloud, identity, and data security that customers can easily add based on their needs. This is the model that has turned Falcon into one of the most scalable cyber platforms on the market. Wedbush’s Ives estimates that only about 45% of enterprise workloads are currently in the cloud. “The best is yet to come,” he said, calling CrowdStrike “the heart and lungs of cloud construction.” As enterprises continue to expand their cloud footprint, Ives sees CrowdStrike as a core player in driving and securing that growth. The current bullishness surrounding CrowdStrike is a sharp departure from last summer’s IT outage, when the company distributed a flawed update to its Falcon security software that caused problems with Microsoft Windows computers running the software. The outage ultimately became one of the world’s largest IT outages, impacting industries from banks to airlines. CrowdStrike has more than recovered from that moment, but Ives doesn’t think the stock gets the respect it deserves. “Investors have been obsessed with looking for cracks in the armor since the black eye appeared last July,” he said. But Ives pointed out that CrowdStrike hasn’t lost a single customer, as Jim Cramer has reiterated. Wedbush analysts added: “Growth is accelerating and we are entering the most important phase of growth.” He called CrowdStrike CEO Kurz’s leadership a “Hall of Fame performance” and described the stock as a “cybersecurity table pounder.” CrowdStrike has established itself as a leader in cybersecurity, but Ives sees many strengths among its peers as the industry moves toward platformization, the idea of cyber companies that aim to provide a one-stop solution for all of their customers’ security needs. PANW 5Y Mountain Palo Alto Networks 5 Years Now comes the club that owns Palo Alto Networks. Ives has a $225 price target on Palo Alto and an Outperform rating of Buy. He praised Palo Alto CEO Nikesh Arora for successfully leading the company into this new era, calling the planned acquisition of identity security company CyberArk “the deal of the decade in cybersecurity.” Palo Alto stock hasn’t enjoyed a CrowdStrike-like rally, with only single-digit gains year-to-date. The stock has been trying to recover since it crashed due to investor dissatisfaction with the CyberArk deal. On Wednesday night, along with its earnings results, the company announced plans to acquire cloud observability platform Chronosphere for $3.35 billion. On Thursday, a day after the company reported better-than-expected fiscal 2026 first-quarter profits and revenue and then raised its full-year outlook, Palo Alto stock was not at all relieved. We’ve seen this trading pattern many times before: stock prices drop immediately after earnings, but quickly recover. As such, we reiterated our rating on Palo Alto of 1, equivalent to a Buy, and our price target of $225. As portfolio director Jeff Marks writes in his earnings analysis, the stock could also fall. That’s because the market may not like that Palo Alto announced a new multibillion-dollar deal “even though it was already working toward the largest deal in its history with CyberArk.” However, Marks added, “We are not too concerned about execution risk as Arora is a deal maker with a track record of successfully integrating new products into a broad platform, which is one of the reasons we invest in the stock.” “We just planted the flag on two new categories: identity and observability,” Arora said on “Mad Money” Wednesday night. Looking ahead, Ives sees cybersecurity becoming “one of the strongest subsectors within all of technology over the next year,” thanks to a strong wave of AI-driven demand that is reshaping the way companies protect their digital infrastructure. This is a sentiment that Jim has espoused over the past year, as the club has chosen to own both Palo Alto and CrowdStrike, which is scheduled to release its latest earnings after the closing bell on Dec. 2 (Jim Cramer 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 can 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.
