Goldman Sachs: Software Stocks Still Have Potential
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 17 hours ago
0mins
Should l Buy CRWD?
Source: CNBC
- Market Reaction Analysis: Goldman Sachs notes that despite the recent turmoil in the software sector, some software companies remain significantly oversold in the S&P 500, indicating that market confidence in these firms persists.
- AI Technology Impact: Analyst Gabriela Borges highlights that the rapid evolution of AI tools poses challenges to traditional software companies' per-seat subscription models, yet existing Systems of Record remain crucial data reservoirs for AI models.
- Investment Opportunity Identification: Goldman emphasizes that software companies with clear architectural moats, such as Snowflake, MongoDB, Shopify, and CrowdStrike, can thrive amid fears of AI disruption, showcasing stable fundamentals and growth potential.
- Stock Price Potential Assessment: Analysts project that Shopify shares have approximately 43% upside potential, while MongoDB, despite a 17% year-to-date decline, is expected to gain over 28%, reflecting optimistic market expectations for these companies.
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Analyst Views on CRWD
Wall Street analysts forecast CRWD stock price to rise
34 Analyst Rating
23 Buy
11 Hold
0 Sell
Moderate Buy
Current: 429.640
Low
353.00
Averages
559.71
High
640.00
Current: 429.640
Low
353.00
Averages
559.71
High
640.00
About CRWD
CrowdStrike Holdings, Inc. is a global cybersecurity company that provides cloud-delivered protection of endpoints, cloud workloads, identity and data. Its Falcon platform is designed for cybersecurity consolidation, purpose-built to stop breaches. The platforms collect and integrate data from across the enterprise, including endpoints, cloud workloads, identities, and third-party sources. It offers 29 cloud modules on its Falcon platform via a software as a service (SaaS) subscription-based model that spans multiple large markets, including corporate endpoint and cloud workload security, managed security services, security and vulnerability management, information technology (IT) operations management, identity protection, next-generation security information and event management (SIEM) and log management, threat intelligence services, data protection, SaaS security posture management, automation and response (SOAR) and artificial intelligence powered workflow automation, and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Acquisition Strategy: CrowdStrike recently announced a $740 million acquisition of SGNL to bolster its identity security management, with CEO George Kurtz stating that as AI agents proliferate across enterprise systems, the company is strategically positioning itself in the identity security space, demonstrating adaptability in a rapidly changing market.
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- Market Sentiment Deterioration: Software stocks continued to slide on Tuesday as investors grew concerned that rapid advancements in AI could weaken demand for traditional enterprise software, with the iShares Expanded Tech-Software ETF (IX) falling over 2%, deepening its year-to-date losses and reflecting a lack of confidence in the software sector.
- CrowdStrike Stock Fluctuations: CrowdStrike (CRWD) shares dropped nearly 4% on Tuesday, bringing its year-to-date decline to about 12%, outperforming the Nasdaq's 17% drop but lagging behind the S&P 500's slight decline of 0.1%, indicating market worries about its future growth potential.
- Analyst Support: Despite the pressures from AI disruption, Truist lowered CrowdStrike's price target from $600 to $550 while maintaining a 'Buy' rating, suggesting analysts remain optimistic about its 'defensible AI security moat' and expect it to be a beneficiary of AI advancements.
- Acquisition Strategy: CrowdStrike recently announced a $740 million acquisition of SGNL to bolster its identity security management, with CEO George Kurtz stating that as AI agents proliferate across enterprise systems, the company is strategically positioning itself in the identity security space, demonstrating adaptability in a rapidly changing market.
See More
U.S. Stocks Close Mixed, Apple Shares Rise on Product Launch News
- Market Performance Fluctuates: On Tuesday, the S&P 500 rose by 0.10%, the Dow Jones increased by 0.07%, while the Nasdaq 100 fell by 0.13%, indicating a mixed market recovery from early losses, with the Nasdaq 100 hitting a 2.75-month low, reflecting investor caution towards tech stocks.
- Apple Product Launch Boost: Apple shares surged over 3% after announcing a product launch on March 4, with several new devices expected in the coming weeks, which not only boosted Apple's market performance but also generated positive sentiment across the tech sector.
- Airline Stocks Rally: Airline stocks showed strong performance on Tuesday, led by a 6% increase in Southwest Airlines after UBS upgraded its rating from neutral to buy with a price target of $73, which not only enhanced the overall performance of airline stocks but also contributed to a more optimistic market outlook.
- Mixed Economic Data: The U.S. February NAHB housing market index unexpectedly fell to a 5-month low of 36, below the expected 38, while the February Empire manufacturing survey slightly declined to 7.1, indicating uncertainty in economic recovery, as the market remains focused on upcoming corporate earnings and economic news.
See More
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- Strong Earnings Report: Palo Alto Networks reported a revenue of $2.59 billion for Q2 FY2026, reflecting a 15% year-over-year increase, surpassing the $2.58 billion consensus estimate, indicating robust performance in the cybersecurity sector.
- Earnings Per Share Growth: The company achieved a 27% year-over-year increase in earnings per share (EPS) to $1.03, exceeding analyst expectations of 94 cents, showcasing improved profitability, yet the market reacted negatively to future guidance.
- Guidance Downgrade Impact: Despite management raising current quarter and full-year revenue forecasts, the stock fell over 8% in after-hours trading due to a lowered outlook on future earnings, highlighting market concerns about profitability.
- AI-Driven Growth Potential: CEO Nikesh Arora emphasized that AI adoption is expanding the attack surface, increasing demand for comprehensive platform security solutions, which is expected to drive higher customer demand and revenue growth in the future.
See More
US Stock Futures Steady as Investors Await Inflation Signals
- Market Stability: US stock futures hovered near the flatline on Tuesday evening as investors looked ahead to upcoming inflation and monetary policy signals, indicating a cautious market sentiment regarding future economic trends.
- Modest Index Gains: During regular trading, the S&P 500 and Nasdaq Composite each rose about 0.1%, while the Dow Jones Industrial Average added roughly 32 points, or just under 0.1%, reflecting a mild optimism in the market.
- Tech Sector Pressure: Technology stocks, particularly in the software sector, remained under pressure, with business intelligence firm Strategy and cybersecurity company CrowdStrike falling 3% and 3.6%, respectively, highlighting investor concerns over the long-term impact of AI on business models.
- Focus on Fed Minutes: Investors are turning their attention to the upcoming release of the Federal Reserve's January meeting minutes for insights into policymakers' thinking, while the key macro event this week will be the personal consumption expenditures price index set to be released on Friday.
See More
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- Impact of Weight-Loss Drugs: Analysts suggest that the rising popularity of GLP-1 weight-loss drugs could lead to lighter passengers and significant fuel savings for airlines, although this overly optimistic view may inflate investor expectations for airline stocks.
- Food Stocks Market Reaction: Despite significant declines in food stocks due to fears surrounding GLP-1, analysts note that while dividends may be attractive, the lack of growth potential limits rebound opportunities, as seen with Conagra Brands.
- AI Market Influence: Comments from Anthropic CEO Dario Amodei have sparked widespread discussions about the future of AI, although the justification for the company's $350 billion valuation is questioned, and the impact on companies like Adobe, Workday, and Salesforce may lead to declining valuations.
- Challenges in Data Center Construction: Analysts emphasize that the cost of building data centers must decrease and power supply must be reliable to achieve profitability in the coming years, although they remain optimistic about the long-term prospects for companies like Amazon, Microsoft, and Alphabet.
See More
Stocks Are Exhibiting Uncommon Behavior, Indicating Potential Opportunities.
- Stock Market Volatility: Individual stock returns have been inconsistent, creating potential buying opportunities for investors.
- Investment Opportunities: Cybersecurity and financial services sectors are highlighted as promising areas for investment.
See More
