CrowdStrike stock sinks 9% because it caused a global tech outage that grounded flights

A defective software update at CrowdStrike led to a massive internet outage that took entire industries worldwide offline Friday.

Now, the Austin, Texas-based cybersecurity technology company that provides software to tens of thousands of companies, is taking a hit to its stock. The firm’s shares were down 9% at market open, trading at $312.90 apiece. They fell more than 12% in pre-market trading.

Microsoft’s shares also dipped 0.42%. The faulty update was found only on Windows hosts, and didn’t affect Mac or Linux systems, CrowdStrike chief George Kurtz said in a post on X.

“This is clearly a major black eye for CrowdStrike and the stock will be under pressure after this global outage related to Microsoft has caused massive disruption globally,” Wedbush Securities analysts said in a note published Friday.

The outage was not caused by a security incident or cyberattack, and the issue has already been identified and isolated, with a fix on its way, Kurtz said at 5:45 a.m. EDT.

While businesses are slowly getting up and running again, the impacts of the brief shutdown were widespread: Flights were cancelled, news broadcasts went off the air, banking systems went offline, and computers everywhere running Windows software showed the “blue screen of death.”

This is a “PR nightmare for CrowdStrike,” Wedbush analysts wrote, as well as for Microsoft and other firms “caught in this tornado.” Although the firm isn’t considered a household name, it’s a giant in the U.S. tech world, with a market capitalization of more than $80 billion. With its name now in headlines, Wedbush recommends a swift cleanup of its image to keep its stock from sinking further as more information about the outage is revealed.

“CrowdStrike has a strong brand and global marketing presence which will need to go into next gear over the coming weeks and months to curtail some damage from this,” the analysts wrote. They noted that the incident — and the reputational fallout — doesn’t change the investment firm’s longterm positive outlook on the company or the cybersecurity sector.