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CrowdStrike: Eating Microsoft's Lunch

May 26, 2023 11:41 AM ETCrowdStrike Holdings, Inc. (CRWD), MSFTS33 Comments
Taylor Irwin profile picture
Taylor Irwin


  • CrowdStrike dominates the Endpoint Security market with several key competitive advantages.
  • CrowdStrike outperforms its largest rival, Microsoft, on a host of metrics.
  • The company’s expansion down-market and into new verticals should continue to propel growth for the next decade.
  • Industry leadership, exploding growth, significant operating leverage, and a hefty balance sheet help justify CRWD’s premium valuation.

Crowdstrike headquarters in Silicon Valley

Sundry Photography

Investment Thesis

Cybersecurity is arguably one of the most attractive markets for investment over the next decade, driven by massive tailwinds in data and cloud computing. CrowdStrike (NASDAQ:CRWD) redefined the market with its innovative Falcon platform in the 2010's

This article was written by

Taylor Irwin profile picture
Curated research on quality growth stocks with 10x potential. Long-term horizon, momentum-based risk management. CFA Level 3 Candidate

Analyst’s Disclosure: I/we have a beneficial long position in the shares of CRWD either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (33)

Why do Marketing majors always feel compelled to include "finance" in their resume? LOL - come on guys -- have some confidence.
Written by a Crowdstrike business dev rep on their lunch break. Looking at IT as a silo, sure this boat floats but it's no more buoyant than MSFT's Defender (which happens to be a destroyer in a larger fleet); look at how MSFT tackles business problems and crowdstrike's value is paltry.
@techdood amen -- MSFT more like an Aircraft Carrier.
Ai is the poison pill for CRWD -- not so with MSFT. The answer as to why requires some Research -- no free lunch -- do some work and see why MSFT knows.
@combatcorpsmanVN please explain? Because companies like CRWD and SentinelOne have integrated AI for several years to help their hunting efforts. People are acting like AI is a new thing all of the sudden. It has been utilized and improving for years.
@Tippsology LOL - a little work doesn't kill a person. Agree, Ai has been around for decades.
Can CRWD and MSFT run side by side for greater endpoint protection? I own a lot of shares in CRWD and have been very happy but if MFST bundles their offer it will concern me.
@StateStreetBoston you could run Falcon and Defender in the same enviro but I don’t know why a business would want to do that. CRWD wins on the MDR front. MSFT isn’t close to that level yet, nor am I sure they want to be. Defender and Azure Sentinel while looping in a SOC to manage the environment. CRWD brings it all together under one roof. But again, for those business that already pay for M365 E3 or higher…bye bye CRWD.

There is room for both companies to thrive. The other players should worry.
@Tippsology thank you
@Tippsology Microsoft's Defender Experts for XDR covers EDR, ITDR, Email/Teams/SaaS attacks. While Microsoft doesn't offer MDR, MXDR is more comprehensive at detecting multi-stage attacks that extend beyond just the endpoint.

Furthermore, you can shift your end-user SOAR to Microsoft's XDR platform without needing a SIEM. This means Indicators of Compromise can lockout devices/users before an attacker even finishes running a script. Whereas CrowdStrike uses Humio/Splunk for a traditional SOAR built on top of a SIEM because CRWD doesn't own a first-party Identity Provider and needs to rely on telemetry from other vendors, which introduces delays into event correlation.

Compared to Microsoft's solution, which runs entirely on Azure and benefits from the increased performance being able to use Microsoft's fiber-optic network to transmit logs for correlation without having to traverse the (slower) open internet, CrowdStrike will always experience network delays due to their multi-vendor XDR approach.
JCC2015 profile picture
But $CRWD is nowhere in the very import EPP security aka $BB
Looking at 2 year charts, stock is recovering but it’s still in the lower beakers, even though evaluation is high
Why is that? PANW had much better recovery, it pulled back but shares continue to go up
Does anyone know why?
Potentially expenses….
birder profile picture
I very recently began a position in CRWD. It is already up 32%. I wish I had bought 5x as much.
You info is not exactly accurate. You aren’t factoring in how MSFT includes Defender in with their M365 E3 and higher plans. TCO easily surpasses the very expensive CRWD. Also, more business already integrated or close to pivoting to M356 level licensing are dropping their EDR incumbents and moving to Defender. The space is crowded, but rapidly shifting.
Taylor Irwin profile picture
@Tippsology I was quoting management’s claims here, not attributing them as true or false
@Tippsology at the risk of being off topic, is there a realistic chance Microsoft acquires Tanium? Any thoughts greatly appreciated.
@Comic123 I think there is a real risk MSFT scoops up any up and coming MDR player in the market. They see security as a key future. And MSFT likes to bolt on rather than creat ;-)
Confirmation bias accepted.
Outstanding corp. will surpass PANW as the Premier Cloud Security service. Currently holding calls with a strike price on $165. Have owned since Jan 2021
It seems very highly priced at the moment at ~12x sales, doesn’t it?
bluescorpion0 profile picture
at $160 I see only return-free risk for the next decade for crwd
PDXGuy profile picture
Wish the ER would be jaw dropping one and lead to $200 next week 🤞. Hope they shall give a excellent forward guidance and forecast.
If Mr Softy wanted that end market it would and could squash crowdstrike like a cockaroach
@motto5448 The customer service from Crowdstrike wins the space.
@motto5448 it's odd that you used that analogy since cochroaches have been on earth since before dinosaurs. Perhaps CRWD will also thrive...the corporate landscape is full of failed giants that have tried to be good at too may things all at the same time.
@Think Forward Microsoft did fail in the past, and revived itself. In my opinion, the company has learnt from it.
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