Shares in cybersecurity firm CrowdStrike Holdings fell on Friday amid a Bloomberg report that its top executives are part of a government probe involving a technology distributor, Carahsoft Technology, and the Internal Revenue Service. CrowdStrike stock has gained 18% in 2025.
The Department of Justice and the Securities Exchange Commission are looking into the $32 million deal, Bloomberg said. As part of the probe, government officials are seeking information on what senior CrowdStrike executives may have known about the deal and are examining other transactions made by the cybersecurity firm, Bloomberg said.
On the stock market today, CrowdStrike stock fell more than 4% to 409.96 in midday trading.
According to Bloomberg, the IRS never purchased or received CrowdStrike products. That raised questions over whether CrowdStrike pre-booked a deal that may not have occurred.
A CrowdStrike spokesperson, in a statement, said: "This is old news and the fact remains we stand by the accounting of the transaction."
Also, the Bloomberg article stated that the government is examining other transactions done by CrowdStrike, including some with the Department of Health & Human Services (DHHS) and Department of Energy, noted a RBC Capital report.
Earlier this week, CrowdStrike said it plans to reduce its workforce by 5%, or about 500 employees.
In a regulatory filing, CrowdStrike estimated the job cuts will lead to charges of $36 million to $53 million, with $7 million to be recognized in the first quarter of its fiscal 2026 year, and the rest in its second quarter.
CrowdStrike Stock: Technical Rating
Also, CrowdStrike reaffirmed fiscal 2026 guidance and indicated Q1 results in line with or above guidance issued in March. CrowdStrike's fiscal year ends Jan. 31.
Additionally, CrowdStrike earnings are due June 3.
CrowdStrike competes with Palo Alto Networks, SentinelOne, Microsoft and others in the "endpoint" market. Endpoint security tools detect malware on laptops, mobile phones and other devices that access corporate networks.
Also, CrowdStrike is building an XDR (extended detection and response) broad, threat-detection cybersecurity platform. This type of platform monitors endpoints as well as web/email gateways, web application firewalls and cloud business workloads.
Meanwhile, CrowdStrike Desk stock holds an IBD Composite Rating of 98, according to IBD Stock Checkup.
IBD's Composite Rating combines five separate proprietary ratings into one easy-to-use rating. Also, the best growth stocks have a Composite Rating of 90 or better.
Follow Reinhardt Krause on X, formerly Twitter, @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
