Core Viewpoint - The software sector in the US stock market has recently faced significant sell-offs due to the rapid development of artificial intelligence (AI), but Wedbush believes the market is overreacting to these concerns, labeling the situation as an exaggerated "doomsday scenario" for the software industry [1][2] Group 1: Market Sentiment and Analysis - The IGV index, which measures software industry performance, has dropped approximately 18% year-to-date, while the S&P 500 index has remained relatively stable, indicating a market pricing in worst-case scenarios for the software sector [2] - Concerns about AI potentially disrupting traditional SaaS models have led to widespread investor panic, especially following the launch of AI tools by companies like Anthropic [3] - Approximately 80% of CIOs currently prioritize AI and machine learning in their IT budgets, raising fears that software budgets may be squeezed by AI investments [3] Group 2: Company-Specific Insights - Microsoft is maintained with a target price of $575, with expectations that its Azure cloud business and AI commercialization will accelerate, potentially marking a key turning point by 2026 [4] - Palantir is given a target price of $230, with its AI platform AIP showing strong demand in commercial and government sectors, particularly in critical applications [4] - Snowflake is assigned a target price of $270, as it is seen as a crucial intermediary for connecting enterprise data with external AI models, emphasizing the importance of data governance and security [4] - Salesforce is maintained with a target price of $375, with its high-quality enterprise data assets viewed as irreplaceable in the AI era [5] - CrowdStrike is given a target price of $600, with the belief that the rise of AI will enhance the importance of cybersecurity, positioning its AI-driven security operations platform as a leading solution [5] Group 3: Long-Term Investment Perspective - Despite the current negative sentiment surrounding the software sector, Wedbush suggests that this "software doomsday" scenario presents a unique opportunity for long-term investors to position themselves favorably [6]

Core Viewpoint - CrowdStrike Holdings (CRWD) stock has experienced a significant decline of 21.9% over the past three months, underperforming the Zacks Security industry's decline of 19.2% [1][7] Group 1: Stock Performance - CrowdStrike shares have underperformed compared to industry peers such as Fortinet (FTNT), Check Point Software (CHKP), and Okta Inc. (OKTA), with Fortinet's shares increasing by 0.2%, while Check Point and Okta have decreased by 10.2% and 2.7%, respectively [1][7] - The stock has dipped below its 50-day and 200-day moving averages, indicating a bearish trend and potential for continued downward pressure in the short term [19] Group 2: Revenue Growth - CrowdStrike's revenue growth has slowed, with a decrease from over 35% year-over-year growth until fiscal 2024 to 29% in fiscal 2025, and expectations of further deceleration to around 21% for fiscal 2026 [6][21] - For fiscal 2026, CrowdStrike anticipates total revenues between $4.797 billion and $4.807 billion, reflecting a year-over-year increase of 21% to 22% [6] Group 3: Cost Pressures - The company faces margin pressure due to rising research and development (R&D) and sales and marketing (S&M) costs, with R&D expenses increasing twelvefold over the last six fiscal years [9][10] - S&M expenses have also surged nearly ninefold to $1.52 billion in fiscal 2025 from $173 million in fiscal 2019, with year-over-year increases of 20.2% and 23.3% for S&M and R&D expenses, respectively, in the third quarter of fiscal 2026 [10][11] Group 4: Profitability Outlook - The Zacks Consensus Estimate for CrowdStrike's fiscal 2026 bottom line is projected at $3.72 per share, indicating a year-over-year decline of 5.3% [12] - The company is currently trading at a high price-to-sales (P/S) multiple of 22.09X, significantly above the Zacks Security industry's forward 12-month P/S ratio of 11.07X, suggesting that CRWD stock is overvalued [15][18]

Core Viewpoint - CrowdStrike Holdings Inc. is positioning itself for significant growth by acquiring SGNL for $740 million to enhance its cybersecurity offerings against AI-driven threats [1][7]. Group 1: Acquisition Details - The acquisition of SGNL focuses on its continuous identity technology, which conducts real-time evaluations to prevent identity exploitation by hackers [1]. - SGNL's technology will be integrated into the CrowdStrike Falcon ecosystem, enhancing CrowdStrike's identity business, which has already achieved over $435 million in annual recurring revenue [2]. - The integration aims to transition from static access models to dynamic, context-aware authorization, allowing for immediate privilege adjustments based on changing threat conditions [3]. Group 2: Strategic Implications - This acquisition aligns with CrowdStrike's broader strategy for 2026, which includes utilizing autonomous AI agents in its security operations center to significantly reduce the time required for complex security tasks [3]. - SGNL's team is expected to join CrowdStrike without planned layoffs following the transaction's anticipated closure in the first quarter of 2027 [3]. Group 3: Company Overview - CrowdStrike provides cybersecurity solutions both in the US and internationally, offering a unified platform for cloud-delivered protection of endpoints, cloud workloads, identity, and data through a SaaS subscription model [4].

Core Viewpoint - The recent decline in software stocks is viewed as a buying opportunity rather than a catastrophic event for the industry, according to Wedbush analyst Dan Ives [1][2]. Industry Overview - The current market sentiment is overly pessimistic, with fears of an impending disaster for software companies being exaggerated [3]. - Concerns about AI's impact on earnings growth, competition, and enterprise adoption have resurfaced amid the sharp market pullback, which is the worst since the "Liberation Day" crash [2]. Company Summaries Microsoft Corp. - Microsoft closed at $414.19, down over 12% year-to-date, with its future tied to Azure cloud growth and its partnership with OpenAI [8]. - Ives projects a price target of $575, believing Microsoft will be a core winner in the AI revolution [9]. Palantir Technologies, Inc. - Palantir's stock has decreased more than 16% year-to-date, closing at $139.54, as it focuses on data analytics and AI software for governments and enterprises [10]. - Ives sets a price target of $230, suggesting Palantir has the potential to reach a trillion-dollar market cap [11]. Snowflake, Inc. - Snowflake has experienced a significant sell-off, dropping over 23% year-to-date, closing at $165.29, amid increased competition in cloud-based data storage and analytics [12]. - Ives expects Snowflake to outperform with a target price of $270, emphasizing its role as a trusted layer for enterprise data [13]. Salesforce, Inc. - Salesforce is down more than 21% year-to-date, closing at $199.44, as it integrates AI tools into its customer relationship management software [14]. - Ives believes Salesforce remains well-positioned for long-term success with a price target of $375, highlighting its strong market opportunity [15]. CrowdStrike Holdings, Inc. - CrowdStrike closed at $415.36, down over 8% year-to-date, as it continues to address rising cybersecurity threats linked to AI and cloud adoption [16]. - Ives sets a price target of $600, asserting that CrowdStrike's position as a cybersecurity leader remains strong despite market challenges [18].

CrowdStrike Holdings, Inc. (NASDAQ:CRWD) is one of the stocks Jim Cramer looked at recently. Cramer highlighted why the stock has been brought down and shared his thoughts on it, as he commented: Now, most of what we’ve seen today does seem like panic selling, with some buying of the companies that pay for software… But there are others who see this pattern, and they decide to avail themselves of ETFs that allow them to short the heck out of software such as the iShares expanded Tech Software Sector ETF o ...

Core Viewpoint - The market is currently favoring hardware and industrial companies while software companies are facing significant declines, driven by fears of obsolescence due to AI advancements [2][4][19]. Group 1: Market Trends - The Dow dropped 167 points, reflecting a broader market trend where software stocks are being heavily sold off, with the NASDAQ down 1.43% [2]. - High-quality enterprise software stocks like Salesforce, ServiceNow, and Adobe reported strong earnings but still saw their stock prices decline significantly [4]. - The market sentiment indicates a collective belief that software companies are at risk of being replaced or diminished by AI technologies [5][16]. Group 2: Company Performance - Major software companies such as Microsoft, Salesforce, Oracle, and Adobe experienced stock declines ranging from 3% to 11% [10][11]. - Companies that utilize software, like Procter & Gamble and FedEx, are currently performing well despite their own earnings challenges [8]. - Private equity firms with stakes in enterprise software companies are also facing pressure, as the market for new public offerings in this sector appears to be closing [18]. Group 3: Investment Strategies - There is a growing trend of investors using ETFs to short software stocks, indicating a bearish outlook on the sector [9]. - Some analysts suggest that it may be prudent to take advantage of the current low prices of certain tech stocks that are being unfairly dragged down by the broader software sell-off [12]. - The shrinking price-to-earnings multiples for software companies suggest that investors are becoming increasingly cautious about future earnings potential [16][17].

Investment Rating - The report does not explicitly provide an investment rating for the industry but indicates a cautious outlook for enterprise SaaS multiples into 2026 due to global uncertainty and technological disruptions [6]. Core Insights - The median EV/TTM revenue multiple for public enterprise SaaS companies decreased to 5x at the end of Q4 2025, down from 5.3x in Q3 2025, and is expected to see limited upside into 2026 [6]. - Revenue growth rates for 2026 are anticipated to step down to high single digits or low double digits, with significant declines expected in several segments, while slight growth is expected in collaboration, productivity, and creative segments [9]. - The median gross margin for public enterprise SaaS companies increased to nearly 77% in 2025, with expectations of continued strength but limited substantial growth in 2026 [10]. - The median EBITDA margin rose to 19.8% in 2025, with expectations for further strengthening across most segments into 2026 [11]. Summary by Sections Revenue - Revenue growth rates for enterprise SaaS companies are projected to decline significantly in 2026, with the median growth rate barely in double digits, down from previous years' rates of 15% to 30% [9]. - The report highlights specific segments expected to experience declines, including CRM, sales, marketing & CX, finance, ERP, HR & payroll, and data, analytics & AI platforms [9]. Valuation - The report notes that valuation multiples have continued to decline, with 76 out of 102 tracked companies experiencing decreases in their EV/TTM revenue multiples from year-end 2024 to year-end 2025 [12]. - Notable companies that outperformed the broader SaaS decline include Unity, On24, and CS Disco, while companies like Ibotta and The Trade Desk saw significant decreases in their multiples [12]. Gross Margin and EBITDA - The median gross margin across public enterprise SaaS companies is projected to remain strong at 77% in 2026, with some segments like DevOps and vertical SaaS expected to see slight growth [10]. - The report anticipates that EBITDA margins will continue to improve, with the highest growth expected in data, analytics & AI platforms and collaboration, productivity & creative segments [11].

Core Viewpoint - CrowdStrike Holdings, Inc. (CRWD) is a cybersecurity company that has underperformed the broader market over the past year, with a market cap of $111.3 billion and a unified platform offering cloud-delivered protection [1][2]. Performance Summary - Over the past 52 weeks, CRWD shares have gained 11.2%, while the S&P 500 Index has increased by 14.3%. Year-to-date, CRWD is down 5.8%, compared to the S&P 500's 1.4% return [2]. - CRWD has outperformed the iShares Cybersecurity and Tech ETF (IHAK), which has seen a 9.5% decline over the same period, but has lagged behind IHAK's 4% year-to-date drop [3]. Analyst Ratings and Price Targets - On January 26, shares of CRWD rose 3.5% after Berenberg analyst Rahul Chopra upgraded the stock rating to "Buy" from "Hold," citing valuation as a key driver and highlighting the company's potential for sector-leading growth [5]. - For the current fiscal year ending in January, analysts expect CRWD's EPS to decline by 57.1% year-over-year to $0.21. The consensus rating among 48 analysts is a "Moderate Buy," with 27 "Strong Buy," 3 "Moderate Buy," 16 "Hold," and 2 "Strong Sell" ratings [6]. - The mean price target for CRWD is $559.21, indicating a 26.7% premium from current levels, while the highest price target of $706 suggests a potential upside of 59.9% [8].

Core Viewpoint - CrowdStrike Holdings Inc. (NASDAQ: CRWD) stock has faced an approximately 8% decline year-to-date, primarily due to broader market pressures affecting technology and software stocks, particularly in the cybersecurity sector [1] Group 1: Market Sentiment and Stock Performance - Analyst sentiment indicates that CRWD stock may be stabilizing ahead of its March earnings report, supported by a bullish upgrade of Fortinet Inc. (NASDAQ: FTNT) from Hold to Buy with a target price of $100, which positively impacted the sector including CrowdStrike [2] - The momentum in the cybersecurity sector suggests that CRWD could be undervalued, presenting a potential entry point for investors as the stock approaches key support levels ahead of earnings [5] Group 2: Impact of AI on Cybersecurity - Concerns regarding the impact of artificial intelligence (AI) on software, particularly "vibe coding," are contributing to the decline in cybersecurity stocks like CRWD, as there are fears that AI may reduce the need for custom coding and endpoint security [3] - Despite these concerns, it is premature to conclude that AI will lead to fewer revenue-generating opportunities for cybersecurity companies, as historical technology shifts have often resulted in the creation of new jobs alongside the loss of others [4] Group 3: Company Performance Metrics - CrowdStrike reported a significant 73% year-over-year growth in net new annual recurring revenue (ARR), amounting to $265 million, indicating strong demand for its cybersecurity solutions despite market challenges [5][6]

Core Viewpoint - CrowdStrike offers a way to hedge investments in the AI sector while capitalizing on the growth of AI in cybersecurity, positioning itself as a strong investment opportunity amidst concerns of an AI bubble [1][2]. Company Overview - CrowdStrike is primarily a cybersecurity company, with its flagship product, Falcon, enhancing the effectiveness and usability of cybersecurity measures [3]. - Falcon integrates multiple cybersecurity functions, such as cloud security, data protection, and threat intelligence, into a single program, making it more cost-effective and user-friendly compared to traditional solutions [4]. Product Features - Falcon operates as a proactive defense mechanism, actively hunting for threats rather than merely serving as a passive shield [7]. - The cloud-native architecture of Falcon allows for collaborative defense across its network, improving its threat detection and response capabilities as more clients join [5]. Performance Metrics - Falcon detects breaches in an average of 4 minutes and achieves a 75% faster mean-time-to-respond (MTTR) compared to previous measures, resolving over 13 million threats annually [10]. - CrowdStrike's market cap is approximately $118 billion, with projected annual revenue nearing $3.8 billion for 2025, indicating robust growth akin to that of a start-up [11]. Financial Growth - For fiscal year 2025, CrowdStrike reported a 31% increase in revenue compared to fiscal 2024, with annual recurring revenue (ARR) growing by 23% [12]. - In Q3 2025, total revenues rose by 22% year-over-year to $1.2 billion, with ARR reaching $4.9 billion, also up 23% [12]. - Operating income increased by 32% to $265 million, with diluted earnings per share (EPS) rising by 26% and free cash flow growing by 28% to $296 million [13]. Market Potential - CrowdStrike anticipates its total addressable market (TAM) will expand from $140 billion in 2026 to $300 billion by the end of the decade, indicating significant growth potential [14]. - The company maintains a strong financial position with total debt of about $818 million against cash reserves of $4.8 billion, supporting continued growth [15]. Investment Appeal - CrowdStrike has outperformed the S&P 500 with a five-year annualized return of 18% compared to the S&P's 13%, and a 25% increase over the last 12 months against the S&P's 14% [15]. - The company presents an attractive option for investors looking to benefit from AI advancements in cybersecurity without directly investing in AI firms [16].