CrowdStrike’s AI Security Boom May Still Have Room to Run

CrowdStrike’s AI Security Boom May Still Have Room to Run

Wed, September 2, 2026 at 7:54 PM GMT+3 3 min read

• CRWD -5.55%

Wall Street experts believe that AI adoption continues to create a cybersecurity spending cycle, with companies increasingly needing to secure AI agents, applications, and cloud workloads. CrowdStrike Holdings, Inc. (NASDAQ:CRWD) is benefiting from this trend, posting record net new ARR of $333 million in Q2 2027, up 51% year-over-year, and upgrading FY27 net new ARR growth guidance by 630 bps to 34%. Revenue also rose 26% to $1.47 billion, driven by elevated demand.

Scotiabank lifted its price objective on CrowdStrike Holdings, Inc. (NASDAQ:CRWD)'s stock to $250 from $227 on August 27, while maintaining a "Sector Outperform" rating. The firm sees broad-based enterprise demand and increased spending on AI security for CRWD. The firm also tagged the company as a medium-term compounder even though it commands a premium valuation.

The Investment Case: Strong Growth, Expensive Valuation

Wall Street analysts believe that the upside case for CRWD revolves around platform expansion and AI security. Falcon Flex ARR crossed $2.29 billion, implying a rise of 101% YoY. Notably, 51% of subscription customers are now using six or more modules. Moving forward, growth is expected to be backed by cross-selling, AI security adoption, and record FCF.

However, bears highlight valuation as the biggest risk. Since expectations for high growth remain elevated, this leaves room for multiple compression if ARR growth slows, module adoption disappoints, or competition intensifies. CrowdStrike Holdings, Inc. (NASDAQ:CRWD) trades at a forward P/E of ~172.4x, significantly higher than that of competitor Palo Alto Networks, Inc. (NASDAQ:PANW)'s forward P/E of ~87.7x.

CrowdStrike vs. Palo Alto Networks- A Comparison

CrowdStrike's strong ARR growth and expanding Falcon platform provide the company with a strong growth profile. On the other hand, Palo Alto Networks, Inc. (NASDAQ:PANW) is benefiting from broader network-security exposure. Overall, CrowdStrike's strong presence across endpoint, cloud, identity, SIEM, and AI security cements its position as the consolidated cybersecurity platform.

Short Interest and Hedge Fund Sentiments

CrowdStrike Holdings, Inc. (NASDAQ:CRWD) has a marginally more favorable short-interest profile, with a short percentage of float of ~2.41% compared to Palo Alto Networks, Inc. (NASDAQ:PANW)'s ~2.77%. This means CrowdStrike has lower bearish positioning and slightly stronger investor confidence.

As per Insider Monkey's database, 89 hedge funds were long on CrowdStrike Holdings, Inc. (NASDAQ:CRWD)'s stock at the end of Q2 2026 compared to 79 funds at the end of Q1 2026.

Conclusion

CrowdStrike Holdings, Inc. (NASDAQ:CRWD)'s recent Q2 2027 results demonstrate that AI continues to become a cybersecurity growth catalyst. Resilient ARR, deeper platform adoption, and robust cash generation aid the long-term compounder thesis. That being said, the elevated valuation reflects that there is limited room for execution mistakes.

While we acknowledge the potential of CRWD as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on thebest short-term AI stock.

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