CrowdStrike (CRWD) is a best-in-class cybersecurity leader poised for a technical breakout from resistance despite being richly valued. There are a few major trends behind cybersecurity. Cybersecurity is a top concern for firms in a post-pandemic world of remote, at-home workers. In addition, the industry will also benefit greatly from the generative AI and cloud computing boom. Looking at CRWD's 12-month relative rotation graph plotted against other major cybersecurity companies, you can see that CRWD is the highest and highest on the vertical scale. This indicates that CRWD has been showing excellent relative strength and relative momentum against other industry names as well as the benchmark S&P 500 over the past 12 months. See how Palo Alto Networks (PANW) hooked and is about to exit the leading quadrant to the left. Morgan Stanley just published an outlook that CRWD's market cap could go from current levels of $85 billion to $100 billion, raise its price target to $422 from $372, and maintain its overweight status. Does that price target fit the technical outlook for the stock? According to Elite Wave analysis, we see the stock moving higher in a high degree 'wave circle V' targeting the upper cluster of the Fibonacci ratio of $410 to $544 over the next 6 to 12 months. We see Morgan's goal a little on the conservative side. The stock came under some pressure and has steadied since last week when competitor Palo Alto Networks reported earnings that beat top- and bottom-line expectations, but fell short of guidance analysts expected. was CrowdStrike is set to report a 56% jump in EPS next week. And the long-term outlook for cybersecurity stocks is quite bullish as we see what Nvidia's Jensen Huang calls the 'next industrial revolution'. CrowdStrike is one of the many names that can safely carry us through this revolution. We allocate 2% to our tactical alpha growth portfolio at Inside Edge Capital. We increased holdings by 50% over our last balance, and will again look to increase exposure. -Todd Gordon, founder of Inside Edge Capital, LLC Disclosures: (Gordon personally owns CRWD and for his wealth management company Inside Edge Capital Management, LLC charts are shown on MotiveWave and Optuma.) Above Content is subject to our Terms and Conditions. policy. This material is provided for informational purposes only and does not constitute financial, investment, tax or legal advice or a recommendation to purchase any security or other financial instrument. The Content is general in nature and does not reflect the unique personal circumstances of any individual. The above content may not be appropriate for your particular situation. Before making any financial decisions, you should strongly consider seeking the advice of your financial or investment advisor. Click here for the full disclaimer.
