CrowdStrike’s (CRWD) Strong Fundamentals Meet a Valuation Firewall

CrowdStrike Holdings Inc. (NASDAQ:CRWD) is one of the 10 best growth stocks to buy according to billionaires. With a YTD share price appreciation of over 40%, CRWD is one of the best-performing stocks in the cybersecurity space. However, the strong rally has raised doubts about the upside potential from current levels.

Recently, Wells Fargo released a mid-year update that expressed a more constructive view on software stocks for the second half of 2025. The firm expects the sector to recover as macro pressures ease and corporate tech budgets begin to stabilize. However, it advises a selective approach over the coming months.

A cybersecurity expert monitoring the security of the company’s assets, emphasizing the importance of data protection.

According to the report, the first half of the year saw increased volatility, with tech stocks fluctuating sharply and investor sentiment dampened by slower-than-expected returns from AI investments. A recent survey by the bank revealed that IT spending increased by just 2% year-over-year in the first half of the year. Still, areas like cloud infrastructure, cybersecurity, and generative AI remain bright spots, showing continued strength despite broader caution in tech spending.

Despite this improving outlook for the sector, CrowdStrike Holdings Inc. (NASDAQ:CRWD) has faced mixed analyst opinions and experienced several downgrades in June.

In the first week of June, Bernstein analyst Peter Weed downgraded CrowdStrike (CRWD) to Market Perform from Outperform, keeping his price target of $371. While the analyst likes the stock fundamentally, he believes the stock is expensively valued at current levels.

In the same week, Bank of America Securities analyst Tal Liani downgraded the stock to Hold from Buy, citing limited upside potential. That said, he raised his price target to $470 from $420 as he now factors in a higher sector multiple.

On the positive side, analysts from RBC Capital, Goldman Sachs, and Piper Sandler, have reiterated their Buy ratings, with price target ranging between $505 and $530.

CrowdStrike Holdings Inc. (NASDAQ:CRWD) is a cybersecurity company specializing in cloud-native endpoint protection, threat intelligence, and incident response services. Its flagship Falcon platform leverages artificial intelligence (AI) and behavioural analytics to detect and prevent cyber threats in real-time.

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 the best short-term AI stock.

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Disclosure: None.