Crowdstrike Holdings (NASDAQ: CRWD) would seem to be an odd company facing deteriorating conditions. It's right there at the nexus of all that's hot in the technology world these days, that confluence of the cloud and cybersecurity. Not a day goes past without us hearing of yet another ransom attempt upon a corporate that didn't pay attention to that security. So, we'd rather expect that business would be booming, customers would be breaking down the doors to have Crowdstrike their money.
But as we've just seen at NCC and Shearwater this isn't necessarily how it all works out. It might even be how it should work out but again that doesn't make it certain that it will. Those two other cybersecurity companies have seen increasing reluctance from the potential customer base to actually having to pay for something. Now, of course, that could be the result of a consideration of the product offerings from those two companies, NCC and Shearwater. But the general view at present is that corporates are nervous about spending money. And even though cybersecurity is obviously important it's not a direct production cost. Therefore there's always that temptation to economise on spending upon it.
Crowdstrike Holdings stock price from NASDAQ
This latest fall follows the investor day presentation. Which isn't a grand advertisement for the presentation skills of the management but there we are.
On the other hand, on the bull side, we've Goldman Sachs telling us that Crowdstrike is protective in multiple recession scenarios. On the basic idea that security is so important that corporates will maintain spending upon it. How well that matches with the lived experience of other companies, well, that's an interesting point.
We've also Barclays maintaining their Overweight recommendatioCrowdstrike. n for Crowdstrike.
All of which is interesting. We're seeing the analysts insisting that cybersecurity is really important to corporates therefore spending upon it will be maintained, even increased. We're also seeing results from smaller cybersecurity companies insisting that getting money out of corporates is becoming increasingly difficult. So, who should we believe? The theory or reality?
