CrowdStrike is not just enjoying a stellar year in the market; it’s defining the very landscape of modern cybersecurity. As a frontrunner in a fiercely competitive sector, it battles alongside rivals like Palo Alto Networks for a slice of the ever-growing corporate cybersecurity budget. While Palo Alto Networks saw its shares dip despite strong earnings, amidst a broader market pullback triggered by Nvidia’s post-earnings cool-down, CrowdStrike’s overall performance remains a testament to its innovative, AI-powered security solutions. Despite Thursday’s dip, the stock is still up over 45% year-to-date in 2025.
Analysts largely see significant future growth for CrowdStrike, with a hefty 65% rating it a “buy” with an average price target of $534, well above the Wednesday closing price of $520.
Dan Ives of Wedbush points to two largely untapped markets as justification for his bullish sentiment: the security of AI ecosystems and cloud infrastructure. According to Ives, Wall Street is “underappreciating” the second and third order effects of the AI revolution on cybersecurity needs. “Investors are not seeing the tidal wave of demand that’s about to come to CrowdStrike,” Ives stated, suggesting the market has yet to price in a true AI premium for the stock. Looking ahead, Ives suggests that properly executed, CrowdStrike’s artificial intelligence strategy could see the stock rise 40% to 50% over 12 to 18 months. Ives updated his target price earlier in the month from $525 to $600.
CrowdStrike CEO George Kurtz has placed a large bet on the “agentic revolution” as the next major catalyst for cybersecurity demand. During the company’s latest earnings call on August 27th, Kurtz predicted that securing the interaction of AI agents and sensitive data will require entirely new layers of protection.
During CrowdStrike’s Fal.Con conference in mid-September, Kurtz went on to describe agentic AI as a cybersecurity opportunity “greater than 100x” that of cloud and endpoint security. He estimated that enterprise businesses could easily deploy millions of AI agents that would require protection, dramatically expanding the addressable market.
Agentic AI systems, capable of completing tasks autonomously, offer significant benefits for businesses. Businesses are exposed to additional cyberattack risks as each AI agent represents a potential entry point for malicious actors.
Kingsly Crane of Canaccord Genuity believes that widespread adoption of these agentic AI systems will take time. He notes that while agentic AI could boost productivity, the adoption will be gradual citing that it is in its early innings.
Ahead of the company’s earnings call back in September, CrowdStrike management announced bullish growth targets, sending shares soaring nearly 13%. These targets include fiscal 2027 net new annual recurring revenue (ARR) growth exceeding 20% year-over-year, a key indicator in the cybersecurity world. CrowdStrike projects $10 billion in ARR by fiscal year 2031 and $20 billion by fiscal year 2036. This ambitious growth will be driven by agentic AI security, next-generation identity and analytics tools, and cloud security.
Crane points out that cloud security is currently CrowdStrike’s fastest-growing sector, with revenue climbing 35% year-over-year. Total cloud ending ARR now exceeds $700 million. While CrowdStrike already commands a significant 20% to 30% market share in this sector, Crane sees further immense upside, estimating the overall market size around $17 billion to $20 billion, with rapid expansion fueled by the continued shift to online services. Ives refers to CrowdStrike as the “hearts and lungs of the cloud buildout”, as only 45% of enterprise workloads are currently in the cloud.
CrowdStrike’s Falcon platform provides a scalable foundation for its diverse product offerings. The company initially focused on endpoint security, deploying lightweight agents on devices to gather threat data. This data is then fed into a cloud-based detection engine. By layering modules such as cloud, identity, and data security, Falcon can provide a very customizable solution that scales greatly to suit the requirements of the customer.
The current optimism surrounding CrowdStrike stands in stark contrast to the IT outage in the summer of 2024, where a faulty update to the Falcon software caused problems on Microsoft Windows-based computers. Even as the effects were felt across multiple industries, Ives points to the fact that CrowdStrike did not lose a single customer throughout the crisis.
Ives acknowledges the importance of the platformization trend, noting the growth of Palo Alto Networks alongside CrowdStrike to meet all the client security needs. He has a $225 price target on Palo Alto stock and an outperform rating. Ives also credited Palo Alto Networks CEO Nikesh Arora on steering the company successfully into its new era and called the company’s planned acquisition of CyberArk as the “deal of the decade in cybersecurity”.
Palo Alto announced plans to buy cloud observability platform Chronosphere for $3.35 billion alongside earnings on Wednesday evening. After reporting better-than-expected fiscal 2026 first-quarter earnings and revenue and boosting its full-year outlook, the stock was getting no relief on Thursday.
Palo Alto’s recent acquisition of CyberArk is perceived to be an indicator of Arora’s integration prowess in the company. Arora has had a very strong track record of integrating new technology platforms into the company.
“Cybersecurity is poised to be one of the strongest subsectors within tech over the next year,” Ives concludes, thanks to the profound impact of AI-driven demand on the way corporations plan to protect their digital assets.
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