CrowdStrike Holdings, Inc.

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CrowdStrike Holdings, Inc. stock analysis CRWD overview
Bullish +75

Palo Alto, CrowdStrike to Post Results as AI Puts Cybersecurity in Focus -- Earnings Preview

📅 Palo Alto Networks and CrowdStrike are scheduled to release their quarterly earnings results this week.

🤖 Both cybersecurity stocks have remained resilient despite concerns that AI models could replace traditional security services.

🔄 A recent sell-off in March due to an Anthropic model leak was followed by a rebound after both firms joined Anthropic's Project Glasswing coalition.

🔍 Analysts view the inclusion in Project Glasswing as validation that AI will increase, not decrease, the demand for cybersecurity services.

🤝 Benchmark analyst Yi Fu Lee noted that top-tier cybersecurity SaaS firms and AI labs need each other to succeed.

🆔 The growth of AI agents has specifically driven interest in identity security for verifying authorized access.

🔄 Palo Alto Networks rebranded its acquired CyberArk firm as Idira, pivoting toward agentic identity security.

📈 Palo Alto stock has risen 63% year-to-date, while CrowdStrike shares are up 66%.

💰 Palo Alto is expected to report third-quarter net income of $354.4 million and revenue of $2.94 billion after market close on Tuesday.

📊 CrowdStrike is projected to report a first-quarter loss of $11 million with revenue of $1.36 billion after the bell on Wednesday.

📉 CrowdStrike's adjusted earnings are expected to be $1.07 per share, compared to 73 cents a year ago.

Bullish Signals
  • CrowdStrike and Palo Alto Networks have remained relatively immune from concerns that AI models could replace their cybersecurity services, demonstrating resilience in the market.
  • Both companies rebounded in April after being included in Anthropic's Project Glasswing, validating analyst views that powerful AI models will increase, not lessen, the need for cybersecurity services.
  • Benchmark analyst Yi Fu Lee noted that top-tier cybersecurity SaaS firms and AI labs need each other, highlighting a strong strategic partnership dynamic.
  • Palo Alto Networks stock has risen 63% this year, reflecting strong investor confidence in its growth trajectory.
  • CrowdStrike shares are up 66% this year, indicating robust market performance and upside potential.
  • CrowdStrike is expected to report a significant improvement in adjusted earnings of $1.07 per share compared to 73 cents a share a year ago, despite a loss.
  • CrowdStrike revenue is projected to grow to $1.36 billion from $1.10 billion a year earlier, showing strong top-line expansion.
  • Palo Alto Networks adjusted earnings are expected to remain steady at 80 cents per share while revenue is forecasted to increase to $2.94 billion from $2.29 billion.
Risk Factors
  • CrowdStrike is expected to report a first-quarter loss of $11 million, compared to a loss of $110.2 million a year ago, though the improvement in adjusted earnings from 73 cents to $1.07 per share may mask underlying profitability concerns.
  • Palo Alto Networks' third-quarter revenue is forecast at $2.94 billion, representing only a 28% increase over last year's $2.29 billion, which could indicate slowing growth momentum in the cybersecurity sector.
  • Both companies have already rallied significantly this year—Palo Alto up 63% and CrowdStrike up 66%—leaving little room for error if earnings miss expectations or if AI-related risks materialize.
  • The recent minor sell-off triggered by a leak about Anthropic's new model suggests that investor sentiment remains sensitive to AI developments, even after rebounds in April.
  • CrowdStrike's adjusted earnings of $1.07 per share are still below Palo Alto's $354.4 million net income and 80 cents per share, highlighting a potential divergence in financial performance between the two leaders.
Full Analysis
CrowdStrike and Palo Alto Networks are set to report quarterly earnings this week, with analysts noting that both companies have remained resilient despite broader concerns about artificial intelligence potentially disrupting the cybersecurity sector. While a recent leak regarding Anthropic's AI model capabilities caused a temporary sell-off in March, shares for both firms rebounded in April after being included in Anthropic's Project Glasswing coalition, which studies the security implications of their models. Analysts view this inclusion as validation that powerful AI models capable of identifying vulnerabilities faster than humans will likely increase demand for cybersecurity services rather than diminish it. Benchmark analyst Yi Fu Lee emphasized that top-tier cybersecurity firms possess telemetry and control planes necessary to complement AI labs' strengths in code understanding and automation, suggesting a symbiotic relationship between the two sectors. Palo Alto Networks has rebranded its acquired identity security firm, CyberArk, as Idira to pivot toward agentic identity security, a strategy driven by the growing interest in verifying access for both human users and AI agents. The stock has risen 63% this year, while CrowdStrike shares are up 66%. For Palo Alto's third-quarter report due after market close on Tuesday, analysts expect net income of $354.4 million, adjusted earnings of 80 cents per share, and revenue of $2.94 billion, compared to a profit of $262.1 million, adjusted earnings of 80 cents per share, and revenue of $2.29 billion a year earlier. CrowdStrike is expected to report first-quarter results after the bell on Wednesday with an anticipated loss of $11 million, adjusted earnings of $1.07 per share, and revenue of $1.36 billion, compared to a loss of $110.2 million, adjusted earnings of 73 cents per share, and revenue of $1.10 billion in the same period last year.