- Software stocks slid further as investors worried that rapid AI advances could weaken demand for traditional enterprise software.
- CRWD shares are down about 12% so far this year, outperforming the Nasdaq’s steeper decline but lagging the S&P 500.
- Several brokerages trimmed price targets but kept positive ratings on CrowdStrike, citing its “defensible AI security moat,” and potential for beat-and-raise earnings.
CrowdStrike Holdings, Inc. (CRWD) shares slid nearly 4% on Tuesday as AI disruption fears rattled software stocks, yet Wall Street still sees room for the cybersecurity firm to climb as much as 70% from here.
CRWD stock fell another 2% in after-hours trading on Tuesday.
AI Anxiety Pressures Software Stocks
Software stocks extended their slide during Tuesday’s session, as investors grew wary that rapid advances in AI could erode demand for traditional enterprise software. The iShares Expanded Tech-Software ETF (IX) fell more than 2%, deepening its losses for the year, while stocks such as ServiceNow, Autodesk, Salesforce, and Oracle also declined.
Sentiment worsened after Palo Alto Networks cut its FY26 outlook, sending its shares down more than 8% in extended trading and adding pressure across the cybersecurity space.
CRWD stock is down about 12% so far this year, outperforming the Nasdaq’s more than 17% decline, but trailing the S&P 500, which is down only 0.1%.
Wall Street Backs CrowdStrike’s ‘AI Security Moat’
On Tuesday, Truist lowered CrowdStrike’s price target to $550 from $600, implying a 33% upside from current levels, but maintained a ‘Buy’ rating. The brokerage said the AI disruption narrative is likely to dominate earnings season as investors try to separate long-term beneficiaries from companies at risk, adding that CrowdStrike and Zscaler are set up for a “beat and raise” and offer “defensible moats for AI security.”
Mizuho also reduced its target, cutting it to $490 from $540, implying an 18% upside from the stock’s last close, while keeping a ‘Neutral’ rating. The firm cited “material multiple compression” across enterprise software and said sentiment toward the sector is “nothing short of horrible” due to AI disruption fears, even as its quarterly checks remained solid.
According to Koyfin estimates, CrowdStrike’s 12-month average target of $546.89 implies about 32% upside from current levels, while the top end of the analysts’ price target range points to gains of more than 70%. Analyst consensus remains positive, with ratings skewed toward ‘Buy’ and ‘Strong Buy’ across 54 covering analysts.
Wall Street Flags CrowdStrike As AI Beneficiary
Earlier this month, RBC Capital trimmed its target to $550 from $621 but reiterated an ‘Outperform’ rating, saying it prefers software names with a clearer path to AI monetization and consolidation, including CrowdStrike.
HSBC also upgraded the stock to ‘Buy’, citing attractive valuation and the company’s leadership position in mission-critical cybersecurity, with multiple avenues for AI-driven expansion and margin growth.
That view echoes Dan Ives of Wedbush Securities, who recently said AI is entering an inflection point and that second- and third-order beneficiaries are being underestimated. Ives pointed to CrowdStrike as one such beneficiary.
CRWD Bets On Identity Security
CrowdStrike has also leaned into identity security as AI adoption accelerates. Last month, the company announced a $740 million acquisition of SGNL to strengthen continuous identity management as AI agents proliferate across enterprise systems. CEO George Kurtz said AI agents operate with “superhuman speed and access.”
How Did Stocktwits Users React?
On Stocktwits, retail sentiment for CRWD was ‘neutral’ amid ‘high’ message volume.
One user said, “This is the only cyber name to be in.”
Another user said, “AI will never eat the need for human oversight in security and law, too much on the line.”
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