This Week in the Markets : Friday July 19th, 2024

The S&P posts worst week since April led by continued selling of semi’s and big tech. June’s surprising lower CPI report marked a turning point in the markets and brought Fed heads out and giddy about now having cover to cut rates. The shift has brought on a selloff in the large caps that have led the way on board the Ai tailwinds over the last 18 months, and into small caps. 

Just after midnight and into early Friday morning, I found myself waiting on a delayed CT scan that had taken more than five hours to review. As I read about the CrowdStrike (CRWD) global IT outage that grounded planes and put a wrench into a wide range of businesses worldwide including the hospital ER room that I was in.

I have long been an investor in (CRWD) and (PANW) as the leading cyber security plays and Friday’s outage had investors selling (CRWD) down by 11% to $304.96. I expect the selling to continue but the outage has really opened eyes to the global reach of CrowdStrike customers as it’s wide range of customers around the world grapple with the largest IT outage in history.

CEO George Kurtz was out facing his many customers saying, “it is up to the independent IT departments that have been impacted to replace the latest bugged tech update,” with an updated content library fix. CrowdStrike sends it’s customers content library updates every hour and every day that are rules engines that run on these company servers.

Going into this morning CrowdStrike had executed flawlessly and as a result has won the business that built a wide scaling client base on that reputation making them the leader in platformification building in the cloud. Today’s massive reaching outage will surely cause larger enterprises to rethink having to rely on one platform.

Crowdstrike should continue to sell off into next week but the drop should present a great opportunity to buy and add to (CRWD). The stock should sell down to the $250 range making it a strong buy.

Importantly the company has come out and addressed the issue as being self-inflicted and not a breach in security efficacy. This looks to be a serious one-off misstep, but CrowdStrike will be better and with 30% plus revenue growth they should once again be the best cyber security solution in the market.