key points
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CrowdStrike’s platform is a leading choice in the cyber security space.
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The company expects the market opportunity to double by 2030.
Cyber security is becoming more important than ever. A hacker’s abilities are increasingly enhanced by technology, including access to agentic AI, which can help bad actors exploit vulnerabilities in a company’s information systems.
It is important to ensure that a business has the best cyber security protection available. This is an industry that is unlikely to be disrupted by generative artificial intelligence. This will give it a boost.
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What I think is the best stock to buy in this sector CrowdStrike (NASDAQ:CRWD). CrowdStrike is already a major cybersecurity player, and the company is taking its security to the next level by incorporating several key elements to protect its customers from cybersecurity attacks.
Cyber hacker.
Image Source: Getty Images.
CrowdStrike’s stock is on sale thanks to AI
As AI coding agents are becoming more popular, many software stocks have sold off heavily over fears that someone could recreate the platform in-house with the aid of an AI coding platform.
While I think some companies are right to be concerned, I don’t think the cybersecurity industry should be worried. If someone makes a mistake (be it the AI platform or the human directing it), the consequences can be disastrous. This makes the sector too risky to use internal resources to build a cyber security platform, so they need to turn to experts like CrowdStrike.
CrowdStrike’s base functionality is endpoint security, which protects network endpoints from cyber threats. It uses AI to detect unusual activity on each endpoint, then shut down the attack before it has a chance to cause serious damage. In total, it has more than 30 modules of enhanced functionality, each add-on increasing the security level of the client. In fact, 50% of customers have more than six modules, demonstrating the strength of CrowdStrike’s ability to sell to customers.
Cybersecurity is a huge and expanding market, and CrowdStrike believes its total addressable market will more than double by 2030. Bullish on stocks and cybersecurity in general, But because CrowdStrike is grouped with other software companies, its stock is taking a hit.
CrowdStrike’s stock is down about 30% from its all-time high, and its valuation has rarely been this cheap.
CRWD PS Ratio Chart
CRWD PS Ratio data by YCharts
While 21x sales may seem expensive (and it is), CrowdStrike is a cybersecurity leader and deserves a premium compared to its peers. I still think the company can deliver tremendous returns in the market, and As cyber threats continue to grow, the need for best-in-class security products continues to grow.
Should you buy stock in CrowdStrike now?
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Keithan Drury There are positions in CrowdStrike. The Motley Fool has a position on CrowdStrike and recommends it. The Motley Fool has one Disclosure Policy.
