CrowdStrike shares slid 8% on Thursday after the company's quarterly forecasts failed to meet steep investor expectations, even though demand for cybersecurity software was buoyed after Anthropic announced its Mythos AI model.
If the losses persist, the cybersecurity firm's $190.29 billion market valuation would shrink by $14 billion.
Some analysts attributed the selloff to profit-taking by investors, as CrowdStrike shares has soared about 90% since the company's last earnings report in March. As of Wednesday's close, the stock was nearly 60% higher this year.
CrowdStrike, like its peers such as Palo Alto Networks, has benefited from strong demand for its AI-powered cybersecurity software, as enterprises look to secure their systems from attackers using technology to steal data.
"What the Mythos moment proved is that the world starting from the frontier AI labs themselves realized that AI needs a cybersecurity ecosystem," CrowdStrike CEO George Kurtz said on the conference call with analysts.
His comments mirrored industry rivals. But analysts say investors sought even stronger growth, as Kurtz touted "a deluge of customer, prospect and partner inquiries" following the April launch of Anthropic's Project Glasswing, in an effort to secure critical software using Mythos.
"Post-Mythos threat landscape readiness reached a fever pitch with the primary question being - Is my organization protected?" Kurtz said. The investor sentiment, once clouded with fears of AI tools disrupting demand for security tools, has shifted to those models being a critical catalyst for demand.
Netskope shares slumped 18.6% while those of Palo Alto fell 2.2%.
CrowdStrike shares traded at 137.74 times their estimated earnings for the next 12 months, compared with 68.91 times for Palo Alto, according to LSEG-compiled data.
Following the results, at least 19 brokerages have raised price targets on the stock, and one has cut.
"While near-term expectations may have been a bit elevated following the recent rally, we continue to see room for further multiple expansion," Morgan Stanley analysts said.
