Why CrowdStrike Stock Soared on Monday
An endpoint security expert is joining one of the preeminent stock market indices.
stock Crowd Strike (CRWD 9.83%) It traded higher on Monday. The cloud-based endpoint security specialist was up as much as 9.9% in early trading and was up 9.1% as of 11:58 a.m. ET.
The catalyst that boosted the cybersecurity stock price was the announcement that it would be joining one of the major trading indices.
Added to S&P 500
In a statement released after the market closed on Friday, CrowdStrike said: S&P 500. Stock will be replaced robert half “These changes make each index more representative of the market capitalization range,” S&P Global said in a press release announcing the changes.
To be included in the S&P 500, a company must be U.S.-based with a market capitalization of at least $8.2 billion. Additionally, at least 50% of the outstanding shares must be publicly traded, and the company must have been profitable in its most recent quarter and cumulatively profitable over the past four quarters.
Stocks often rise in response to additions to one of the major indices because institutional investors and funds that track these benchmarks must purchase stocks to match the index composition. This doesn’t mean anything about the underlying company has changed. Rather, it’s an acknowledgment that the operational and financial excellence that helped the company meet its qualifications will make it a good investment going forward.
The roots of artificial intelligence (AI)
As interest in artificial intelligence (AI) has grown over the past year, CrowdStrike has also gained attention. That’s because CrowdStrike has long been using machine learning and other forms of AI to combat the growing number of hacks, breaches and other unauthorized systems. Entrance.
The company continued its relentless rise last week. During the first quarter of fiscal 2025 (ending April 30), CrowdStrike generated revenue of $921 million, up 33% year-over-year, and adjusted earnings per share increased 67% to $0.93. The company continues to generate strong operating and free cash flow and add customers.
For these reasons, CrowdStrike stock is a buy.
Danny Vena holds a position at CrowdStrike. The Motley Fool participates in and recommends CrowdStrike. The Motley Fool recommends Robert Half. The Motley Fool has a disclosure policy.
