Nearly a year after being at the center of what many call the largest IT outage in history, CrowdStrike (CRWD) seems to have regained Wall Street’s confidence.
The cybersecurity giant made headlines last July when a faulty update to its Falcon platform triggered a global meltdown, causing 8.5 million Microsoft Windows systems to crash and fail to restart properly.
The list of disrupted industries was staggering: hospitals, banks, airports, airlines, and even stock exchanges were affected.
In response, CrowdStrike stock plunged 36% over the following 11 trading sessions.
But with a $119 billion market cap and massive enterprise footprint, the company was big enough to absorb the financial hit, though its brand took a less quantifiable reputational blow.
CrowdStrike didn’t help its public image earlier this year when a leaked internal memo revealed plans to cut 500 jobs, citing AI-driven “efficiencies.”
CEO George Kurtz told employees that artificial intelligence "flattens our hiring curve and helps us innovate from idea to product faster," adding that AI serves as a "force multiplier throughout the business."
The timing and tone drew a lot of criticism.
Toby Walsh, professor of AI at the University of New South Wales, called the announcement "pretty tone deaf," suggesting CrowdStrike would have been better served redeploying those employees to strengthen its emergency response and quality control teams.
But Wall Street isn’t holding the stumble against them.
CrowdStrike stock is up 39.2% year-to-date and 24.6% over the past year, signaling that investors remain bullish on the company’s fundamentals.
The rebound got another boost last Thursday when the U.S. District Court for Western Texas dismissed a class-action lawsuit filed by airline passengers who claimed they experienced flight disruptions tied to the software failure.
Because airlines are regulated under the federal Airline Deregulation Act (ADA), the court ruled state-law claims couldn’t proceed.
“We are grateful for the Court's thoughtful consideration and decision to dismiss this case,” said Cathleen Anderson, CrowdStrike’s chief legal officer.
While the massive outage stemmed from a glitch in its Falcon platform, analysts argue that Falcon’s dominance is also what gives CrowdStrike its edge.
"The stickiness of its platform gives CrowdStrike considerable competitive strength," Morningstar equity analyst Malik Ahmed Khan said.
"CrowdStrike has been enhancing its security portfolio by adding cloud security, identity security, and security operations offerings. These newer initiatives have garnered strong customer traction, allowing CrowdStrike to embed itself further into its customer's security ecosystems."
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