Key Highlights
- Morgan Stanley elevated CrowdStrike to Overweight and designated it a “Top Pick” in the software sector
- Analysts increased the price target from $487 to $510
- The stock posted gains in each of the first six trading sessions of March, accumulating a 17% increase
- Annual recurring revenue expanded 24% compared to the prior year
- The company secured 28% of new endpoint security spending during Q4 2025
CrowdStrike Holdings has kicked off March with impressive momentum, and Morgan Stanley expects the trend to continue.
CrowdStrike Holdings, Inc., CRWD
The investment firm elevated CRWD to Overweight from Equal-weight on Tuesday, pushing its price target from $487 to $510. The analysts also designated the cybersecurity stock as a “Top Pick” within the software category — a significant endorsement in a highly competitive sector.
CRWD dipped 0.1% to $433.60 on Tuesday, though this followed six consecutive trading days of gains to start March, totaling a 17% advance.
The momentum originated from earnings results released the prior Tuesday. CrowdStrike delivered a 24% increase in annual recurring revenue compared to the previous year, exceeding analyst projections and energizing investors.
Morgan Stanley analysts Meta A. Marshall and Keith Weiss emphasized: “CrowdStrike remains in rarified air as the only software vendor at scale with >20% revenue growth.”
Expanding Platform Adoption
The company’s growth extends beyond a single product line. CrowdStrike has been winning customers from both emerging competitors and established legacy systems. During Q4 2025, the firm captured 28% of new spending in the endpoint security segment — leading the category, according to Morgan Stanley AlphaWise research.
Falcon Flex, the company’s adaptable purchasing model, plays a major role in this success. The program allows clients to deploy prepaid credits across various security modules, simplifying the process of adopting the complete platform instead of purchasing separate solutions. Analysts noted this approach has been “enabling larger deals and creating strong customer relationships” — and the program launched just a few quarters ago.
Approximately half of the endpoint security market continues to operate on outdated technology, presenting CrowdStrike with substantial expansion opportunities.
Valuation Debate and AI Considerations
Skepticism remains among some market participants. CRWD currently trades at approximately 15 times estimated 2027 revenue, compared to roughly 13 times for comparable high-growth software companies. This valuation gap raises concerns for certain investors.
The emergence of AI represents another consideration. Security tools from OpenAI and Anthropic have generated discussion about whether AI-native platforms could challenge CrowdStrike’s position.
CEO George Kurtz responded to these concerns last week, characterizing AI as a “growth opportunity” for the company. Morgan Stanley supported this view, noting that effective real-time threat protection demands zero latency and near-perfect accuracy — capabilities that current AI security solutions have yet to achieve. These newer tools primarily focus on code security rather than live threat detection.
The firm argues the valuation premium is “justified given potential topline re-acceleration, improving margin profile, and highly defensible moat across multiple areas of the security stack.”
Free cash flow margins exceeding 30% strengthen the investment thesis.
Among 57 analysts monitored by FactSet, 70% maintain Buy or equivalent ratings on the stock. The other 30% hold neutral positions. Zero analysts currently recommend selling.
The stock had achieved an unblemished winning streak through Tuesday’s trading session in March.
