What Happened?
Shares of cybersecurity company CrowdStrike (NASDAQ:CRWD) jumped 7.1% in the morning session after stocks rebounded, following a broad-based sell-off the previous day. The Nasdaq was down 4%, while the S&P fell 2.7% as concerns over the ongoing trade war continued to spread.
While those concerns haven't exactly disappeared, it's likely some investors looked to take positions in some of the beaten-down stocks, especially some of the high-quality names that got caught up in the sell-off.
The shares closed the day at $329.69, up 6.7% from previous close.
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What The Market Is Telling Us
CrowdStrike’s shares are somewhat volatile and have had 14 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 6 days ago when the stock dropped 10.8% on the news that the company reported mixed fourth quarter (fiscal 2025) results: Its full-year revenue guidance was just in line, while full-year operating profit guidance missed Wall Street's estimates. The profit guidance miss was due to investments in platform resiliency, AI efficiencies, and sales and marketing costs, some of which are from CCPs (customer compensation packages) following the July 19, 2024 outage.
On the other hand, CrowdStrike beat analysts' annual recurring revenue (ARR), revenue, and operating profit expectations during the quarter. Sales climbed 25% year-on-year, largely driven by a 27% growth in subscription revenue as companies leaned more on its Falcon platform. Overall, the quarter was solid, but the guidance was mixed, and the latter weighed on shares.
CrowdStrike is down 5.1% since the beginning of the year, and at $329.61 per share, it is trading 27.6% below its 52-week high of $455.36 from February 2025. Investors who bought $1,000 worth of CrowdStrike’s shares 5 years ago would now be looking at an investment worth $7,692.
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