Shares in cybersecurity companies CrowdStrike (CRWD) and Palo Alto Networks (PANW) jumped higher on Monday morning. This came as investors picked up on analysts’ bullish comments on the companies.
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Why Wells Fargo Is Bullish on CrowdStrike
On Sunday, Wells Fargo analyst Richard Poland gave bullish commentary on Wells Fargo. Poland pointed out that his industry checks show that customers appear focused on spending on platform security and products. Notably, CrowdStrike and Palo Alto Networks are outdoing their year-to-date targets as a result.
Bernstein Defends Buy Rating on Palo Alto Networks
On the other hand, Bernstein analyst Peter Weed maintained his Buy rating on Palo Alto Networks and assigned a price target of $253. However, the target implies about 23% downside risk.
Weed noted that the market values of Palo Alto and CrowdStrike are too high. However, he prefers Palo Alto due to its organic growth prospects.
“[Both companies] have a clear fit to current market demand driven by cloud modernization and AI, and a lot of headroom in our perspective long term (which is infrequent in cybersecurity),” Weed argued.
Why Bernstein Remains Cautious of CrowdStrike Stock
Unlike Palo Alto Networks, the Bernstein analyst remains cautious of CrowdStrike shares and reaffirmed his Market Perform (Hold) rating on the stock. He kept his price target at $413, implying roughly a 45% downside risk.
During Q1 fiscal 2027, which ended on April 30, CrowdStrike saw its total annual recurring revenue (ARR) reach $5.51 billion. This marked a 24% growth from the year-ago period.
Looking ahead, however, Weed sees the possibility that CrowdStrike’s total ARR may come in less than 25% over the next few quarters and then worsen afterward. The analyst believes that certain operational setbacks could hinder the company’s growth, even if demand for its products remains strong.
Which Cybersecurity Stock Is the Better Buy?
CrowdStrike (CRWD) and Palo Alto Networks (PANW) both currently carry Strong Buy consensus ratings and downside risk on Wall Street. However, TipRanks’ Stock Comparison tool shows that PANW is likely to suffer the lesser impact.
