CrowdStrike (CRWD) Stock Surges 17% As Morgan Stanley Calls It a Top Software Pick

TLDR

• Morgan Stanley upgraded CrowdStrike to Overweight and named it a “Top Pick” in software
• Price target raised to $510 from $487
• CRWD stock climbed 17% in the first six trading days of March
• Annual recurring revenue grew 24% year-over-year
• CrowdStrike captured 28% of incremental endpoint security spending in Q4 2025

CrowdStrike Holdings has had a strong start to March, and Morgan Stanley thinks there’s more to come.

CrowdStrike Holdings, Inc., CRWD

The firm upgraded CRWD to Overweight from Equal-weight on Tuesday, lifting its price target to $510 from $487. It also named the stock a “Top Pick” in software — a stamp of approval that carries weight in a sector where competition is fierce.

CRWD slipped 0.1% to $433.60 on Tuesday, but that’s after climbing every single trading day in the first six sessions of March, adding up to a 17% gain.

The catalyst for the run was an earnings report the previous Tuesday. CrowdStrike posted a 24% jump in annual recurring revenue from a year earlier, beating expectations and giving bulls fresh ammunition.

Platform Momentum Building

The growth story isn’t just about one product. CrowdStrike has been pulling customers away from both newer rivals and older legacy providers. In Q4 2025, the company grabbed 28% of incremental spending in the endpoint security market — the highest share in the category, per Morgan Stanley AlphaWise data.

A big driver is Falcon Flex, the company’s flexible purchasing program. It lets customers use prepaid credits across multiple security modules, making it easier to adopt the broader platform rather than buying point solutions. The analysts said this has been “enabling larger deals and creating strong customer relationships” — and it’s only been rolling for a few quarters.

About half the endpoint security market still runs on legacy tech, which gives CrowdStrike a large pool of potential customers to go after.

Valuation and AI Questions

Not everyone is convinced. CRWD trades at roughly 15 times projected 2027 sales, while other high-growth software names sit closer to 13 times. That premium gives some investors pause.

There’s also the AI question. Tools from OpenAI and Anthropic have sparked debate about whether new AI-native security products could eat into CrowdStrike’s market.

CEO George Kurtz addressed this directly last week, calling AI a “growth opportunity” rather than a threat. Morgan Stanley backed him up, pointing out that real-time threat protection requires zero latency and near-100% accuracy — two things current AI security tools don’t yet deliver. Those tools are mostly focused on code security, not live threat detection.

Free cash flow margins are above 30%, which adds to the bull case.

Of 57 analysts tracked by FactSet, 70% have a Buy or equivalent rating on the stock. The remaining 30% are at Hold. No analyst currently has a Sell rating.

The stock entered Tuesday’s session having not posted a single down day in March.

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