Positive Outlook for Cybersecurity Spending in 2026
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 53 minutes ago
0mins
Source: seekingalpha
- Cybersecurity Budget Growth: Jefferies' survey of 40 executives indicates that cybersecurity budgets are expected to grow 6.2% year-over-year in 2026, aligning with IT and software budget growth, albeit slightly lower than the 6.6% growth in 2025, highlighting the continued prioritization of cybersecurity spending by enterprises.
- AI-Driven Spending: The survey reveals that spending on AI and machine learning is emerging as a positive catalyst for the cybersecurity sector, with analysts suggesting that companies like Palo Alto Networks and Okta will benefit, particularly in the identity management subsector.
- Spending Winners Analysis: In 2026, 56% of respondents expect to increase spending on Palo Alto Networks, although this is down from 66% in December 2025; CrowdStrike and Zscaler also show positive spending expectations at 44% and 43%, respectively, indicating a favorable outlook for these firms.
- Rising Cloud Security Demand: With cloud spending projected to rise from 9.6% growth in 2025 to 10.1% in 2026, this is expected to drive demand for cloud security solutions, particularly benefiting vendors like CRWD, PANW, and ZS, as security remains a critical factor in enterprises' cloud vendor selection.
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Analyst Views on CRWD
Wall Street analysts forecast CRWD stock price to fall
34 Analyst Rating
23 Buy
11 Hold
0 Sell
Moderate Buy
Current: 678.650
Low
353.00
Averages
559.71
High
640.00
Current: 678.650
Low
353.00
Averages
559.71
High
640.00
About CRWD
CrowdStrike Holdings, Inc. is a global cybersecurity company. The Company provides a cloud-native platform for protecting critical areas of enterprise risk - endpoints and cloud workloads, identity, and data. The Company's artificial intelligence (AI)-native CrowdStrike Falcon platform is a cloud-native unified platform built with AI at the core, capable of harnessing security and enterprise data to deliver highly modular solutions through a single lightweight sensor. Using cloud-scale AI, its Security Cloud enriches and correlates cybersecurity events with indicators of attack, threat intelligence, and enterprise data (including data from across endpoints, workloads, identities, DevOps, IT assets, and configurations) to create actionable data, identify shifts in adversary tactics, and automatically prevent threats in real-time across its customer base. It sells its Falcon platform via a partner-first subscription model to organizations of all sizes across multiple industries globally.
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.
Positive Outlook for Cybersecurity Spending in 2026
- Cybersecurity Budget Growth: Jefferies' survey of 40 executives indicates that cybersecurity budgets are expected to grow 6.2% year-over-year in 2026, aligning with IT and software budget growth, albeit slightly lower than the 6.6% growth in 2025, highlighting the continued prioritization of cybersecurity spending by enterprises.
- AI-Driven Spending: The survey reveals that spending on AI and machine learning is emerging as a positive catalyst for the cybersecurity sector, with analysts suggesting that companies like Palo Alto Networks and Okta will benefit, particularly in the identity management subsector.
- Spending Winners Analysis: In 2026, 56% of respondents expect to increase spending on Palo Alto Networks, although this is down from 66% in December 2025; CrowdStrike and Zscaler also show positive spending expectations at 44% and 43%, respectively, indicating a favorable outlook for these firms.
- Rising Cloud Security Demand: With cloud spending projected to rise from 9.6% growth in 2025 to 10.1% in 2026, this is expected to drive demand for cloud security solutions, particularly benefiting vendors like CRWD, PANW, and ZS, as security remains a critical factor in enterprises' cloud vendor selection.
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- Chipmaker Sell-off: The significant drop in Samsung Electronics and SK Hynix shares led to a more than 5% decline in South Korea's Kospi Index, triggering a global downturn in semiconductor stocks and exacerbating market uncertainty.
- Oil Price Impact: WTI crude oil prices fell over 3% to a four-month low on Friday, which helps lower inflation expectations and supports the stock market, but also reflects potential slowdowns in global economic growth.
- Consumer Sentiment Revision: The University of Michigan's consumer sentiment index was revised upward by 0.6 to 49.5, although still below the expected 50.0, indicating a cautious consumer outlook that may affect future spending.
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- Margin Improvement: During the same period, the adjusted subscription gross margin rose from 77% to 81%, indicating enhanced operational efficiency and laying a solid foundation for future profitability.
- Increased Customer Stickiness: By fiscal 2025, the percentage of customers using at least six modules more than doubled from 24% to 50%, demonstrating the growing appeal and stickiness of CrowdStrike's Falcon platform despite macroeconomic challenges.
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- Strong Financial Performance: The company reported a 26% year-over-year revenue growth in its latest fiscal quarter, adding $256 million in annual recurring revenue (ARR), marking the highest addition in the company's first fiscal quarter history, indicating robust business momentum.
- Record Free Cash Flow: CrowdStrike generated $468 million in free cash flow this quarter, significantly exceeding earnings expectations, which underscores the company's exceptional profitability and cash generation capabilities, thereby boosting investor confidence.
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CrowdStrike Announces 4-for-1 Stock Split Amid Strong Earnings
- Stock Split Announcement: CrowdStrike has announced a 4-for-1 stock split effective July 2, aimed at making its shares more accessible to retail investors, particularly after a 60% rise in stock price in 2026.
- Sustained Growth Momentum: The company reported a 26% year-over-year revenue growth in its latest earnings report, adding $256 million in net new annual recurring revenue (ARR) in the first fiscal quarter, marking the highest addition in company history, indicating strong market demand.
- Outstanding Cash Flow Performance: CrowdStrike generated $468 million in free cash flow this quarter, an all-time high that significantly exceeded market expectations, showcasing its ongoing profitability enhancement.
- AI Security Infrastructure: CEO George Kurtz emphasized that CrowdStrike's leadership in AI security infrastructure will be a key growth driver moving forward, although its current valuation at 34 times revenue remains high, prompting investors to carefully assess valuation risks.
See More
Positive Outlook for Cybersecurity Spending in 2026
- Cybersecurity Budget Growth: Jefferies' survey of 40 executives indicates that cybersecurity budgets are expected to grow 6.2% year-over-year in 2026, aligning with IT and software budget growth, albeit slightly lower than the 6.6% growth in 2025, highlighting the continued prioritization of cybersecurity spending by enterprises.
- AI-Driven Spending: The survey reveals that spending on AI and machine learning is emerging as a positive catalyst for the cybersecurity sector, with analysts suggesting that companies like Palo Alto Networks and Okta will benefit, particularly in the identity management subsector.
- Spending Winners Analysis: In 2026, 56% of respondents expect to increase spending on Palo Alto Networks, although this is down from 66% in December 2025; CrowdStrike and Zscaler also show positive spending expectations at 44% and 43%, respectively, indicating a favorable outlook for these firms.
- Rising Cloud Security Demand: With cloud spending projected to rise from 9.6% growth in 2025 to 10.1% in 2026, this is expected to drive demand for cloud security solutions, particularly benefiting vendors like CRWD, PANW, and ZS, as security remains a critical factor in enterprises' cloud vendor selection.
See More
U.S. Stocks Close Lower on Friday, Chipmakers Weigh on Market
- Market Decline: The S&P 500 and Nasdaq 100 fell by 0.05% and 1.09% respectively on Friday, reaching two-week lows, indicating market sensitivity to the weak performance of chipmakers, which could undermine investor confidence.
- Chipmaker Sell-off: The significant drop in Samsung Electronics and SK Hynix shares led to a more than 5% decline in South Korea's Kospi Index, triggering a global downturn in semiconductor stocks and exacerbating market uncertainty.
- Oil Price Impact: WTI crude oil prices fell over 3% to a four-month low on Friday, which helps lower inflation expectations and supports the stock market, but also reflects potential slowdowns in global economic growth.
- Consumer Sentiment Revision: The University of Michigan's consumer sentiment index was revised upward by 0.6 to 49.5, although still below the expected 50.0, indicating a cautious consumer outlook that may affect future spending.
See More
CrowdStrike Announces 4-for-1 Stock Split
- Significant Revenue Growth: CrowdStrike's revenue surged from $874 million in fiscal 2021 to $4.81 billion in fiscal 2026, reflecting over a fivefold increase that underscores the strong market demand for its cloud-native subscription services and the success of its business model.
- Margin Improvement: During the same period, the adjusted subscription gross margin rose from 77% to 81%, indicating enhanced operational efficiency and laying a solid foundation for future profitability.
- Increased Customer Stickiness: By fiscal 2025, the percentage of customers using at least six modules more than doubled from 24% to 50%, demonstrating the growing appeal and stickiness of CrowdStrike's Falcon platform despite macroeconomic challenges.
- Limited Impact of Stock Split: While the upcoming 4-for-1 stock split may make the share price appear cheaper, it will not alter the company's valuations, suggesting that investors should focus on its long-term growth potential rather than short-term market fluctuations.
See More
Pax8 VP Discusses AI Adoption for Small Businesses
- AI Integration Leadership: Chance Weaver, VP of AI Adoption at Pax8, leads efforts to accelerate AI integration across a network of over 39,000 managed service providers, aiming to enhance operational efficiency for small businesses through measurable business outcomes.
- Innovation Driver: As the founder of IT Responsive and with experience in Microsoft-driven initiatives at New Charter Technologies, Weaver's background strengthens Pax8's competitive edge by empowering partners to build, scale, and monetize AI solutions.
- Industry Recognition: With over 28 years in technology and business development, Weaver was honored with the MSP 501 Lifetime Achievement Award in 2023, highlighting his significant contributions to AI adoption and innovation, thereby enhancing Pax8's reputation in the industry.
- Market Platform Advantage: Pax8, as a global leader in the AI and cloud marketplace, connects over 47,000 IT partners and 800,000 SMBs, providing automation and real-time insights that help clients remain competitive and productive in the AI economy.
See More
CrowdStrike Announces 4-for-1 Stock Split Amid Strong Earnings
- Stock Split Announcement: CrowdStrike will implement a 4-for-1 stock split on July 2, aimed at making its shares more accessible to retail investors, particularly after a remarkable 60% increase in stock price in 2026.
- Strong Financial Performance: The company reported a 26% year-over-year revenue growth in its latest fiscal quarter, adding $256 million in annual recurring revenue (ARR), marking the highest addition in the company's first fiscal quarter history, indicating robust business momentum.
- Record Free Cash Flow: CrowdStrike generated $468 million in free cash flow this quarter, significantly exceeding earnings expectations, which underscores the company's exceptional profitability and cash generation capabilities, thereby boosting investor confidence.
- AI Security Infrastructure: CEO George Kurtz emphasized that CrowdStrike is critical for AI security infrastructure, which could lead to substantial growth opportunities, although the current valuation remains high, posing a risk for potential investors.
See More
CrowdStrike Announces 4-for-1 Stock Split Amid Strong Earnings
- Stock Split Announcement: CrowdStrike has announced a 4-for-1 stock split effective July 2, aimed at making its shares more accessible to retail investors, particularly after a 60% rise in stock price in 2026.
- Sustained Growth Momentum: The company reported a 26% year-over-year revenue growth in its latest earnings report, adding $256 million in net new annual recurring revenue (ARR) in the first fiscal quarter, marking the highest addition in company history, indicating strong market demand.
- Outstanding Cash Flow Performance: CrowdStrike generated $468 million in free cash flow this quarter, an all-time high that significantly exceeded market expectations, showcasing its ongoing profitability enhancement.
- AI Security Infrastructure: CEO George Kurtz emphasized that CrowdStrike's leadership in AI security infrastructure will be a key growth driver moving forward, although its current valuation at 34 times revenue remains high, prompting investors to carefully assess valuation risks.
See More
