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KEY TAKEAWAYS
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CrowdStrike shares plunged in premarket trading Friday, while those of its rivals surged, after the cybersecurity firm said an update “defect” caused Microsoft’s cloud services outage.
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The outage impacted services globally of airlines, banks, and other businesses Friday.
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Wedbush analyst Dan Ives told CNBC that while CrowdStrike’s long-term story stayed intact, rivals “will try to take advantage of this.”
CrowdStrike (CRWD) shares plunged 12% in premarket trading Friday, while those of its rivals surged, after the cybersecurity firm said an update “defect” caused a worldwide outage in Microsoft’s (MSFT) cloud services.
In a statement, CrowdStrike CrowdStrike Chief Executive Officer (CEO) George Kurtz blamed the outage on a “defect” in the firm’s update of its Falcon software. The outage impacted services globally of airlines, banks, and other businesses Friday.
“CrowdStrike is actively working with customers impacted by a defect found in a single content update for Windows hosts. Mac and Linux hosts are not impacted,” Kurtz said in a post on X. “This is not a security incident or cyberattack. The issue has been identified, isolated and a fix has been deployed.”
Shares of Rivals Palo Alto Networks, SentinelOne Surge
Investors bought into CrowdStrike’s rivals as the scale of the damage from the cybersecurity firm’s update was increasingly known. Palo Alto Networks (PANW) rose 2.5% while SentinelOne (S) jumped 7% an hour before the opening bell.
“This is a black-eye moment for CrowdStrike, and I think for the cybersecurity sector,” Wedbush analyst Dan Ives told CNBC in an interview. “The big issue is the brand damage, because CrowdStrike today becomes a household name but not in a good way.”
“I don’t think this changes the long-term story (for CrowdStrike), but other competitors—Palo Alto and others—they will try to take advantage of this,” he added.
CrowdStrike shares had risen 34% in 2024 through Thursday’s close to $343.05.
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Source: finance.yahoo.com