On April 30, 2025, CrowdStrike Holdings Inc. (NASDAQ: CRWD) announced it was expanding its partnership with ExtraHop. The two companies had already been working together to help enterprises detect and contain the shadow risks posed by artificial intelligence (AI).
[content-module:CompanyOverview|NASDAQ: CRWD]Deals like this are popping up throughout the cybersecurity sector. But does this deal make CRWD stock stand out, or is it just one of many in a crowded field?
Many investors are flocking to cybersecurity stocks because of the threats from AI. The many benefits of AI come with the risk that bad actors can use the technology for malicious purposes. In January 2025, the World Economic Forum reported that approximately 50% of organizations cited Generative AI as their top concern.
That makes cybersecurity essential to corporations. For their part, cybersecurity companies are racing to incorporate AI capabilities into their product offerings.
CrowdStrike and ExtraHop Tackle a Shadow Threat
Shadow AI is exactly what it sounds like. These are tools that exist outside the visibility of traditional information technology (IT) and security teams. By bypassing these established security controls, they create blind spots that bad actors can use to access sensitive data or introduce misconfigurations that lead to breaches.
Under this expanded partnership, CrowdStrike’s Falcon Next-Gen SIEM platform will be able to ingest ExtraHop’s cloud-native network detection and response (NDR) platform, RevealX. This will give a company’s Security Operations Center real-time visibility into unauthorized AI service usage and the ability to act autonomously to protect sensitive data.
AI Is Causing CrowdStrike to Streamline Operations
CrowdStrike isn’t just using AI to enhance the services it offers to its customers. It is also using AI to streamline its own operations. On May 7, 2025, CrowdStrike announced it would cut approximately 5% of its global workforce (about 500 employees).
The company says the cuts are part of a strategic initiative to become more efficient and assist it in achieving its goal of achieving $10 billion in annual recurring revenue (ARR) by January 2026.
It also illustrates the side of AI that is less comfortable for investors: that AI will be replacing a portion of the workforce. In the press release that accompanied the announcement, CrowdStrike acknowledged that AI flattens its hiring curve. However, CrowdStrike says it will continue hiring in critical areas. The company pointed out customer-facing and product engineering roles.
Investors should note that the layoffs will result in a charge between $36 million and $53 million, of which $7 million will be recorded in the current quarter. That means those charges won’t be reflected in the company’s upcoming earnings report. The majority of those costs will go toward severance, benefits, and stock-based compensation.
The Good and the Bad Heading Into Earnings
[content-module:Forecast|NASDAQ: CRWD]CrowdStrike doesn’t report its quarterly earnings until June, but investors may be getting a hint from analysts. Through the first eight days of May, the CrowdStrike analyst forecasts on MarketBeat show that four analysts have reiterated their bullish ratings and, in the case of JMP Securities, raised the price target from $400 to $500. And Rosenblatt Securities reiterated a price target of $450.
Both targets are significantly higher than the $403 consensus price target. At $450, CRWD stock would be on track to make a new all-time high (ATH). That suggests that analysts believe CrowdStrike is preparing to deliver a strong earnings report. It could also mean investors may want to wait for a slight pullback before taking or adding to a position.
But here’s why investors may want to wait. Even among technology stocks, CrowdStrike shares are significantly overvalued at its current level. By itself, that’s not a dealbreaker. However, analysts forecast an approximate 12% decline in the company’s earnings per share (EPS). That would suggest that investors may not want to pay a premium valuation for CRWD stock.
Where Should You Invest $1,000 Right Now?
Before you make your next trade, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis.
Our team has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and none of the big name stocks were on the list.
They believe these five stocks are the five best companies for investors to buy now...
