The Fallout of the Recent Cyber Outage on CrowdStrike and Microsoft
As you navigate the aftermath of the global cyber outage on July 19, major players such as CrowdStrike and Microsoft are facing a significant challenge. Delta Airlines has taken legal action against these companies in pursuit of compensation for the disruption caused to their flights.
Delta Air Lines, slowest among U.S. carriers to recover from the outage, experienced over 2,200 flight cancellations on July 19, with an additional 6,000 cancellations following suit. Analysts project potential financial losses ranging from $350 to $500 million for Delta, with an even higher estimate of $1.5 billion for insurers.
CrowdStrike Stock Price
Currently, CrowdStrike’s stock is valued at $258.81, showing a slight increase of 1.03% in the most recent trading session despite a 3.90% decline over the past five trading days. However, news of the lawsuit has resulted in a 4.72% drop in pre-market trading.
- CrowdStrike shares have fallen below the rising trend channel in the medium to long term, signaling weakened growth prospects.
- The stock has breached the support level at $283, indicating a potential further decline.
- Negative volume balance and strongly negative short-term momentum, as evidenced by the RSI below 30, suggest increasing pessimism among investors.
CrowdStrike Faces Potential 30% Downside
CEO of Lupton Capital, Jonah Lupton, anticipates a further decline of 20-30% for CrowdStrike, primarily due to the impact of the Delta Air Lines lawsuit and potential lawsuits from other affected companies. Airlines collectively estimate losses exceeding $1 billion. The response from Microsoft will be critical in determining the company’s future course of action.
- CrowdStrike’s current valuation appears precarious given the uncertainties and potential financial liabilities associated with the lawsuits.
- Financial projections may need downward revisions, with a portion of the $3 billion cash reserves potentially earmarked for settlements and fines.
- Should Lupton’s predictions materialize, CRWD stock could see a significant drop to $181.167.
Despite the Lawsuit, Analysts Remain Bullish on CRWD Stock
While the lawsuit poses a significant challenge for CrowdStrike, Wall Street analysts maintain a positive outlook on the stock’s long-term prospects. Despite recent setbacks, analysts believe that CRWD stock will rebound, with minimal long-term effects anticipated.
- Morgan Stanley expects CrowdStrike to recover swiftly from the outage, citing a proactive response from the company.
- While being removed from the “Top Pick” list, CrowdStrike still receives an “overweight” rating from Morgan Stanley with a $360 price target.
- JPMorgan analysts, while lowering their price target, also maintain an “overweight” rating for CrowdStrike due to near-term challenges.
Hot Take: Navigating the Future for CRWD Stock
As you assess the implications of the recent cyber outage on CrowdStrike and Microsoft, it’s essential to stay informed and monitor the evolving situation. With potential lawsuits looming and financial uncertainties in the horizon, prudent decision-making and strategic planning are crucial as you navigate the volatility in the market.
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