Adrian Johnson
TLDR:
- CrowdStrike shares dropped over 14% after a major IT outage caused by an update affecting its Falcon Sensor product.
- Microsoft also reported issues affecting its Azure cloud services and Microsoft 365 suite of apps, falling 2% in premarket trading.
In a significant turn of events, cybersecurity company CrowdStrike experienced a major outage that led to a plunge in its shares. The issue, caused by an update affecting its Falcon Sensor product, impacted businesses worldwide. CrowdStrike CEO George Kurtz clarified that the problem was not a security incident or cyberattack, but a defect found in a single content update for Windows hosts. Microsoft also faced difficulties with its Azure cloud services and Microsoft 365 suite of apps, contributing to a 2% drop in premarket trading.
The global outage highlighted the interconnected nature of the cyber supply chain, showcasing how a single point of failure can have significant ripple effects. While CrowdStrike has been a standout performer in the cybersecurity sector, with its shares rising by nearly 118% in the past year, some analysts have raised concerns about the company’s lofty valuation. Redburn Atlantic downgraded CrowdStrike’s stock to “sell,” citing challenges in penetrating the large enterprise market and maximizing cross-sell opportunities.
As CrowdStrike’s shares plummeted, other cybersecurity vendors such as Palo Alto, Fortinet, Zscaler, and Cloudflare saw gains, as investors speculated that businesses may seek alternatives to CrowdStrike in light of the outage.
