Shares of CrowdStrike (CRWD +0.01%) finished the day up after the embattled cybersecurity stock benefited from the broader market rebound, got an analyst upgrade, and a report emerged pushing back on Delta's lawsuit against CrowdStrike in the wake of the massive tech outage in July.
CrowdStrike finished the day up 4.3% on the news.
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CrowdStrike bounces higher
Tech stocks rebounded after a three-day slide today as investors got a break from downbeat economic news and took the opportunity to buy beaten-down stocks.
CrowdStrike also got an upgrade from Piper Sandler this morning as the research firm raised its rating on the stock from neutral to overweight after the post-outage sell-off and hiked its price target from $290 to $310. Analyst Rob Owens noted that historically, outages and breaches have not had much of an impact on cybersecurity businesses like CrowdStrike.
Additionally, multiple media sources reported that Microsoft pushed back on Delta's claims related to its lawsuit against CrowdStrike regarding the tech outage. Microsoft said Delta's outdated technology contributed to the slow recovery and that Delta declined Microsoft's offers for help.
Microsoft's comments could help protect CrowdStrike from liability in the incident or at least reduce its exposure. The global outage was caused by Microsoft's Windows operating system crashing due to a bug in a CrowdStrike software update.
NASDAQ: CRWD
Key Data Points
Is it safe to buy CrowdStrike?
CrowdStrike stock is now down 32% from where it was before the outage started, giving investors a significant discount on the stock.
While there is certainly still risk to CrowdStrike in its reputation, further legal action, and a loss of business, it seems like the cybersecurity specialist can overcome the outage, assuming this is just a one-time incident.
It's difficult to switch cybersecurity providers. The company is generally recognized as having the best endpoint security software, and its reputation was strong before the incident.
We'll learn more in the company's earnings report at the end of the month, but the current price seems to offer a good buying opportunity for long-term investors.
