Software stocks had a rough Friday, and CrowdStrike fell 7.02%

CrowdStrike

CrowdStrike fell 7.02% on Friday to US$227.39. The cybersecurity company has lost 17.3% in a week, and 18.5% since it closed at US$278.86 on 6 October.

Its neighbours fared no better. Palo Alto Networks lost more than 7%, and Palantir, which sells data software to governments and companies, fell 7.22%. By Yahoo Finance's count, 43 of the 45 software stocks it tracks finished lower.

Cybersecurity copped the worst of it. The First Trust Nasdaq Cybersecurity fund, which holds the sector's big names, fell about 10% over the week. Yahoo Finance says that was its worst week since March 2020.

Chart: CrowdStrike slid 18.5% after a long climb. CrowdStrike's closing share price in US$ at each January year end since 2022, then on 6 and 16 October 2026; the last two columns are days apart, not years. — This story’s chart of the day: the numbers, the dark version and the animated version are on its own page. The chart’s page →

Two worries did the damage. The first is the one dragging on chipmakers: whether the money being poured into AI will earn a return, now that the 10-year Treasury yield sits at 5.09%.

The second is specific to security. On Tuesday a report said OpenAI plans to buy a cybersecurity startup. No target and no price were named, but investors took it as a sign that AI companies may build security into their own products.

Our view

nothing in CrowdStrike's business changed this week. The share price moved because investors changed their minds about what AI means for its customers. I'd want to see an AI company actually win a big security contract before treating that as a threat to the business.

This story ran in Tech Takes a Beating Saturday 17 October’s edition, with the market snapshot, the other two stories, the numbers and the week ahead. Read the whole edition →

More in

All stories →

Thursday 12 November Microsoft fell 2.3% after its biggest cloud customer launched a rival to Excel
Tuesday 29 September MongoDB lost 18% of its value because Meta wanted its chief executive

General information and commentary only, not financial advice. It does not take account of your objectives, financial situation or needs, and reflects the author's own reading of public information at the time of writing, which may be wrong. Sharespective, its people and its clients may hold positions in the companies covered. Do your own research and talk to a licensed adviser.