We recently published a list of 10 Best Performing Cybersecurity Stocks in 2024. In this article, we are going to take a look at where CrowdStrike Holdings, Inc. (NASDAQ:CRWD) stands against other best performing cybersecurity stocks in 2024.
Data Breaches to Disruptions
The technology sector has expanded rapidly in recent years, creating an increasingly interconnected digital world. Cybersecurity, a relatively new field, has become critical as the volume of sensitive data stored online has surged. This growth has unfortunately provided more opportunities for cybercriminals to commit financial theft, steal confidential information, and disrupt vital infrastructure. In 2023 alone, data breaches affected over 349 million individuals, highlighting a troubling trend. The Consumer Sentinel Network received a surge in reports, with fraud making up over 2.6 million cases and identity theft surpassing one million. The scale of these threats is substantial; according to McKinsey, damages from cyberattacks could reach approximately $10.5 trillion annually by 2025—a 300% increase from 2015 levels.
A Microsoft Security survey reveals that small and mid-sized businesses (SMBs) face added challenges due to limited resources and expertise in implementing and managing advanced security solutions to detect, prevent, or mitigate cyberattacks. Fewer than one-third of respondents indicated that their SMBs handle security internally; the majority rely on consultants, managed service providers, or cyber insurance guidelines for choosing security tools.
AI Meets Cybercrime
As AI technology advances, data privacy and risk management concerns are escalating for individuals and businesses alike. Although regulators are exploring strategies to foster AI innovation while minimizing potential negative impacts on society, the United States still lacks comprehensive federal legislation addressing AI.
AI is transforming the cybersecurity landscape from both the threat and defense perspectives, creating a long-term growth path. “Cyber threats continue to evolve, and as digital transformation accelerates, so does the potential for cyberattacks,” noted Christopher Gilchrist, principal analyst at Forrester. Earlier this year, The World Economic Forum predicted that AI could push cyber incidents and data breaches to hit record levels in 2024, following a 72% year-over-year rise in breaches in the past year.
Nonetheless, the technology holds transformative potential for security. Palo Alto Networks remarked that 2024 “will be a phenomenal year in the utilization of AI in cybersecurity,” yet predicts even greater advances in the future. For investors, this growth represents an intriguing opportunity. According to Acumen research, the global market for AI-driven cybersecurity products was valued at around $15 billion in 2021, with projections to reach approximately $135 billion by 2030. AI’s ability to analyze vast data sets and detect patterns makes it especially effective for tasks like penetration testing, where systems are deliberately probed for vulnerabilities. By deploying AI tools to assess their own technology, organizations can identify weaknesses proactively—closing gaps before hackers have the chance to exploit them.
The constant evolution of external threats means that cybersecurity must continually adapt to stay ahead of emerging risks, with the top players racing to deliver innovative solutions to remain competitive.
Security personnel at their consoles, monitoring a global network of threats in real-time.
Our Methodology
To compile our list of the best-performing cybersecurity stocks this year, we reviewed the holdings of various cybersecurity ETFs and sorted them by year-to-date performance, as of November 8, in ascending order. Additionally, we included hedge fund sentiment on each stock to provide further context and insight into each company’s outlook.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
CrowdStrike Holdings, Inc. (NASDAQ:CRWD)
Year-to-Date Performance as of November 8: 33.67%
Number of Hedge Fund Holders: 69
CrowdStrike Holdings, Inc. (NASDAQ:CRWD) specializes in cybersecurity solutions, offering products like identity management, threat intelligence, and detection. Its primary offering, the AI-native Falcon platform, achieved impressive growth at 80% year-over-year in the second quarter of fiscal 2025.
Earlier this July, a faulty software update by CrowdStrike Holdings, Inc. (NASDAQ:CRWD) triggered widespread technology outages across multiple industries, causing the company’s shares to plunge nearly 44% within two weeks, bottoming out in early August. Despite this setback, CrowdStrike’s stock has been on a steady recovery, though it hasn’t yet returned to its pre-incident highs. Investor sentiment around the company has turned optimistic, with 34 Wall Street analysts rating the stock a Buy and only six as Hold.
CrowdStrike’s strong fiscal second quarter of 2025, which ended shortly after the incident, fueled much of this optimism. The company reported a 32% year-over-year revenue increase and turned an operating profit compared to a loss in the same period the prior year. Net income per share rose to $0.19 from just $0.03 a year earlier. While Falcon’s performance continues to drive subscriptions, the company’s executives are targeting $10 billion in annual recurring revenue by the end of fiscal 2029, a goal that looks achievable as it focuses on margin improvements.
ClearBridge Growth Strategy stated the following regarding CrowdStrike Holdings, Inc. (NASDAQ:CRWD) in its Q3 2024 investor letter:
“Shares of CrowdStrike Holdings, Inc. (NASDAQ:CRWD), a global cybersecurity leader, came under pressure following a software content update in July that caused widespread disruptions across its client base. Importantly, the outage was not caused by a security breach and we are encouraged that the company was swift and transparent in its response and support for customers. While some level of recompense will be required, after ongoing dialogue with company management, we are optimistic that thoughtful remediation efforts, such as offering flexibility around new module uptakes, will position the company well for future growth. Shares have since rebounded on the back of better than feared channel feedback, which suggests CrowdStrike remains a best-in-class provider in the eyes of customers.”
Overall, CRWD ranks 6th on our list of best performing cybersecurity stocks in 2024. While we acknowledge the potential of CRWD, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CRWD but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
