BTIG securities downgraded Crowdstrike and it fell about 4.5% today. Normally, I don’t care about analyst downgrades. I think that they are mostly a trailing indicator, but this downgrade is based on a channel check. I share the concern that others have that Palo Alto Networks may have a good enough solution that they can sell to their much larger customer base (80,000) compared to CrowdStrike’s customer base (9,896).
Because of those concerns, I reduced my allocation of CrowdStrike from about 25% to about 11.5% 2 months ago. It’ll be interesting to see if the growth is slowing. I am still cautiously optimistic about CRWD. George Kurtz, CrowdStrike’s CEO, mentioned that companies have reduced insurance rates if they use CRWD services when interviewed by Jim Cramer. I don’t now if Palo Alto Networks can say the same. It’ll be interesting, and the devil is in the details with a channel check. I guess we’ll have to wait for the earnings on 12/2 to get more color on this.