In this article, we will take a look at the 4 best tech stocks to buy according to Bank of America. If you want to read our analysis of the bank’s overall outlook on the tech sector, go directly to the 8 Best Tech Stocks to Buy According to Bank of America.
4. CrowdStrike Holdings, Inc. (NASDAQ:CRWD)
Stock Price as of June 9: $178.84
Number of Hedge Fund Holders: 80
CrowdStrike Holdings, Inc. (NASDAQ:CRWD) is an Austin, Texas-based provider of cloud endpoint security. The company considers itself amongst the rank of other market leaders such as Salesforce, Inc. (NYSE:CRM) and ServiceNow, Inc. (NYSE:NOW) in the cloud computing space.
CrowdStrike Holdings, Inc.’s (NASDAQ:CRWD) subscription customers increased by 57% YoY and stood at 17,945 as of Q1 2022, with 65 of the Fortune 100 companies on board. The company has maintained a dollar-based retention rate of more than 120% in the past 17 quarters. This means that CrowdStrike Holdings, Inc. (NASDAQ:CRWD) is generating more revenue from the same group of customers after incorporating the impact of the churn rate. The retention rate for the company stands at an all-time high of 98%.
Analysts at Bank of America have given CrowdStrike Holdings, Inc. (NASDAQ:CRWD) a price target of $210, reflecting a potential upside of over 21% from the current share price. BofA believes that the 20% reduction YTD in the share price of CrowdStrike Holdings, Inc. (NASDAQ:CRWD) makes it attractive due to various reasons. CrowdStrike Holdings, Inc. (NASDAQ:CRWD) is continuing to introduce new modules to its Falcon platform, which is providing the company with more options and increasing the total addressable market. Data has revealed that the number of cloud modules used by subscription customers increases over time. The company is generating incremental revenue of $1.4 for every $1 spent on sales and marketing.
CrowdStrike Holdings, Inc. (NASDAQ:CRWD) was discussed in the Q1 2022 investor letter of Baron Funds. Here’s what the asset management firm said:
“CrowdStrike, Inc. provides cloud-delivered, next generation security solutions via its Falcon platform consisting of end-point protection, advanced persistent threat, security information, event management, and cloud workload protection. Shares rose 11% in the first quarter, on the back of impressive quarterly results with net new annual recurring revenue (ARR) accelerating for the second straight quarter to 52% year-over-year and the company’s favorable unit economics driving 30% free cash flow margins. Moreover, key new disclosures highlight how non-end-point products are seeing momentum with cloud product-generated ARR surpassing $100 million, representing 8% of net new ARR in the quarter. With more workloads migrating to or starting in the cloud, we believe CrowdStrike is well positioned to compound at high growth rates for years given its unique product platform and attractive go-to-market business model.”