CrowdStrike (CRWD) Stock Downgraded: Why Morgan Stanley Is Stepping to the Sidelines

CrowdStrike Holdings, Inc. (NASDAQ:CRWD) is one of the AI Stocks in the Spotlight TodayOn July 14, Morgan Stanley downgraded the stock to Equal-weight from Overweight and raised the price target on the stock to $495 from $490.

Analysts led by Keith Weiss said that they were “stepping to the sidelines given full valuation after ~50% run and rising growth expectations,” highlighting limited upside potential for the stock.

The firm believes that even though acceleration expected in the second half seems to be well-priced into shares, Crowdstrike still offers a compelling story. The company remains a market leader in cybersecurity, poised to benefit from the increasing platform consolidation anticipated industry-wide. The rise of artificial intelligence is likely to boost this growth.

CrowdStrike (CRWD) Stock Downgraded: Why Morgan Stanley Is Stepping to the Sidelines

The analysts stated that the second quarter “print is unlikely to be a thesis-changing event given clear investor focus on 2H, and we continue to have limited visibility into Customer Commitment Package (CCP) renewals and Falcon Flex contract impacts on revenue recognition and margins.”

Overall, the firm is optimistic about Crowdstrike’s long-term growth potential. However, they are currently moving to the sidelines, waiting for better entry points to build positions.

CrowdStrike Holdings, Inc. (NASDAQ:CRWD) is a leader in AI-driven endpoint and cloud workload protection.

While we acknowledge the risk and potential of CRWD as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CRWD and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.