Cybersecurity company Crowdstrike’s (NASDAQ:CRWD) stock joined the S&P 500 index alongside the stocks of GoDaddy (NASDAQ:GDDY) and KKR (NYSE:KKR).
CRWD stock rose sharply in pre-market trading this morning. Despite a slight dip around 11:00 a.m. Eastern, the shares have been mostly stable since the market opened. CRWD stock carries a price of $378 per share and a market capitalization of about $92 billion. Shares are up 53% so far in 2024 and nearly 490% since it came public about five years ago.
Big Days for CyberCops
Cybersecurity has become a huge market over the last few years due to growing global tensions, the rise of criminal gangs, and the increased complexity of cloud-based computing.
The total market was estimated to be worth $181 billion last year and is growing at 10% per year.
Crowdstrike, based in Austin, is considered the leader in endpoint security within the cloud security market. It has about 18% of that $8.6 billion market despite competing directly with Microsoft (NASDAQ:MSFT). The company is expanding into general cloud security.
For the quarter ending in May Crowdstrike earned $43 million, 18 cents per share fully diluted, on revenue of $921 million. The company is estimating full-year earnings will be about $4 per share on revenue of about $4 billion.
Crowdstrike’s lead product is Falcon Defender, which it says can detect a cyberattack on a client’s infrastructure in just four minutes. Equivalent products using the same tests from Microsoft and Palo Alto Networks (NASDAQ:PANW) took 24 minutes to detect an attack. Crowdstrike also said its attack reports were more accurate than those of competitors.
Stocks entering the S&P 500 always get a boost as hedge funds trading the index are required to buy them. Shares of private equity firm KKR have gone up 11% since their inclusion was announced.
Crowdstrike has recently benefited from Microsoft’s bungled launch of its Recall feature. Crowdstrike CEO George Kurtz has called Microsoft’s statements on cybersecurity “lip service.”
CRWD Stock: What Happens Next?
Cybersecurity will remain a hot market but will also remain subject to disruption by new technology. No lead is truly safe.
As of this writing, Dana Blankenhorn had a LONG position in MSFT, and PANW. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
