Can Rising Demand for AI Security Boost CRWD's Long-Term Growth?

CrowdStrike sees AI security demand fueling growth as enterprises expand AI use, boosting adoption of Falcon, Charlotte AI and cloud security tools.

CrowdStrike $CRWD Holdings Inc. CRWD is witnessing artificial intelligence (AI) security become one of its biggest long-term growth opportunities. On the fourth quarter of fiscal 2027 earnings call, management stated AI is driving higher demand for the Falcon platform because enterprises need security solutions that can protect AI workloads, AI agents, cloud infrastructure and employee AI usage. The company sees AI adoption creating larger attack surfaces and rising cybersecurity spending across industries, which is increasing the need for CrowdStrike's cybersecurity tools.

CrowdStrike is seeing AI-driven demand across multiple business segments. For instance, in the fourth quarter, CrowdStrike's endpoint business accelerated for the second consecutive quarter due to growing AI usage on enterprise devices. Falcon sensors detected more than 1,800 distinct AI applications and nearly 160 million AI application instances across customer environments. Further, CrowdStrike is seeing strong growth in cloud security and Next-Gen SIEM as enterprises invest in securing AI infrastructure and workloads.

Charlotte AI is becoming a key part of CrowdStrike’s AI strategy. In the fourth quarter, Charlotte AI usage increased more than six times year over year, while ARR tied to Charlotte more than tripled. CrowdStrike now offers Charlotte, along with 10 additional AI agents focused on automating security tasks and improving security operations center efficiency. A key customer win during the fourth quarter included a leading cloud software provider customer, which signed an eight-figure re-Flex deal involving Charlotte AI and Next-Gen SIEM after achieving three times faster response times.

The above-mentioned factors show that as enterprises continue expanding AI deployments, CrowdStrike’s prospects are set to benefit as AI security continues to become a larger long-term growth opportunity for the company. The Zacks Consensus Estimate for fiscal 2027 and 2028 revenues indicates a year-over-year increase of around 22.8% and 21.4%, respectively.

How Competitors Fare Against CRWD

Competitors like Palo Alto Networks $PANW PANW and SentinelOne S are also gaining ground through platform expansion and AI innovation.

In the second quarter of fiscal 2026, Palo Alto Networks saw robust growth in its Next-Gen Security ARR, which increased 33% year over year. The growth was driven by increased customer adoption of PANW’s advanced cybersecurity offerings, including its AI-driven XSIAM platform, SASE and software firewalls.

Though comparatively a small competitor, SentinelOne posted fourth-quarter fiscal 2026 year-over-year growth of 22% in its ARR. The growth was fueled by the rising adoption of SentinelOne’s AI-first Singularity platform and Purple AI.

CRWD’s Price Performance, Valuation and Estimates

Shares of CrowdStrike have jumped 26.7% in the year-to-date period compared with the Zacks Security industry’s return of 24.2%.

CRWD YTD Price Return Performance

Image Source: Zacks Investment Research

From a valuation standpoint, CrowdStrike trades at a forward price-to-sales ratio of 24.01, significantly higher than the industry’s average of 13.96. The Zacks Value Score of F also suggests that CRWD stock is overvalued.

CRWD Forward 12-Month P/S Ratio

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for CrowdStrike’s fiscal 2027 and 2028 earnings indicates year-over-year growth of 30% and 26.7%, respectively. The estimates for fiscal 2027 and 2028 have both remained unchanged over the past 60 days.

Image Source: Zacks Investment Research

CrowdStrike currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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