On September 14, during the episode of Mad Money, Jim Cramer said CrowdStrike Holdings, Inc. (NASDAQ:CRWD) is emerging as a beneficiary of growing concerns over the cybersecurity risks created by artificial intelligence, as he said:
Over the weekend, the co-founder and CEO of Anthropic published an essay where he pushed for a slowdown among the frontier AI labs in order to handle newfound security concerns. In response to that, the cybersecurity cohort just went crazy because there are the companies that can prevent AI agents from randomly hacking into networks all over the world, and it’s the cybersecurity companies. Take CrowdStrike, which shot up nearly 14% today, leading the S&P 500, something I feel great about, of course, because we own it big for the Charitable Trust. These guys have been adamant that AI represented a great opportunity for their business, and now Wall Street’s finally gotten the memo.
CrowdStrike’s AI Opportunity Comes With Strong Operating Growth
CrowdStrike Holdings, Inc.’s second-quarter fiscal 2027 revenue increased 26% year over year to $1.47 billion, while ending annual recurring revenue rose 25% to $5.84 billion. Net new ARR reached a record $332.8 million, and free cash flow was $377.4 million. The company also raised its full-year fiscal 2027 net new ARR growth outlook to 34% at the midpoint, up 630 basis points. CEO George Kurtz said the company believes securing AI is its “largest market opportunity in our history.”
Kurtz said on September 14 that AI-driven threats are already operating at machine speed, describing the emerging threat as autonomous campaigns rather than individual hackers. He identified endpoints, cloud workloads and SaaS as key battlegrounds and said “enforcement at machine speed” is needed to stop AI agents in motion. CrowdStrike has responded by expanding into AI-agent, model and infrastructure protection, including Continuous Identity for AI Agents and Falcon AI Detection and Response.
CrowdStrike’s Valuation Leaves Little Room for a Slowdown
CrowdStrike Holdings, Inc.’s valuation leaves little room for a meaningful slowdown in growth. Yahoo Finance currently shows a forward P/E of approximately 188.7 times and a price-to-sales ratio of roughly 44.6 times. Those multiples leave little room for a material slowdown in ARR growth, weaker adoption of newer products, or greater competitive pressure. The company also remains much less profitable on a GAAP basis than its adjusted results suggest. The company reported a $33.2 million GAAP operating loss in the latest quarter against $371.6 million of non-GAAP operating income, while stock-based compensation and related employer payroll taxes totaled $399 million.
The raised 34% net-new ARR growth outlook strengthens the growth case, but it also raises the execution bar. At such a valuation, continued cybersecurity demand alone is not enough; CrowdStrike must sustain rapid ARR growth while converting that expansion into substantially higher GAAP earnings. A meaningful slowdown could possibly put pressure on a stock already priced for substantial future growth.
Hedge Fund Ownership Rises While Short Interest Remains Limited
As per Insider Monkey, which tracks more than 1,000 hedge funds, 89 hedge funds held CRWD in Q2, up from 79 in Q1. Of those funds, D E Shaw was the biggest shareholder and increased its position in the quarter by 18% to 8.53 million shares. Short interest is comparatively modest, as its short position was roughly 2.4% to 2.5% of the float.
Cramer’s comments put CrowdStrike Holdings, Inc.’s recent rally in the context of a broader shift in how investors are viewing AI-related cybersecurity demand. The company is already growing ARR at a high rate, but its elevated valuation leaves the stock sensitive to any slowdown in that growth.
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