As concerns about an artificial intelligence (AI) bubble grow, investors are searching for ways to capitalize on AI’s impact without tying their fortunes solely to tech stocks heavily reliant on this emerging technology. One company that stands out as an indirect beneficiary of AI advancements is CrowdStrike, a leader in the cybersecurity realm.
The evolution of AI, especially generative AI, has dominated discussions in the stock market since the introduction of ChatGPT in 2022. While fears of a bubble emerge, the bullish spirit surrounding AI projects a continued growth trajectory well into 2026. For investors looking to hedge their AI investments, CrowdStrike presents an alluring option.
CrowdStrike is not just another cybersecurity firm; its flagship product, Falcon, differentiates it in the market. Offering a comprehensive approach, Falcon integrates various cybersecurity functions—such as cloud security, data protection, and threat intelligence—into one streamlined solution. This integration enhances usability and efficiency, making it easier and more cost-effective for businesses to manage their cybersecurity needs.
What sets Falcon apart is its cloud-native architecture. The more clients that deploy CrowdStrike’s Falcon Sensors, the more robust the system becomes. If one part of a network is breached, the system learns and adjusts, improving defenses across the entire network—a dynamic akin to self-repairing armor. This means that Falcon operates with a proactive rather than reactive approach, actively hunting for threats rather than merely shielding against them.
The increasing sophistication of cyberattacks, exacerbated by AI’s capabilities, highlights the necessity for CrowdStrike’s innovative solutions. Notably, AI empowers hackers to execute relentless cyberattacks automatically, creating challenging landscapes for cybersecurity measures. Falcon’s ability to respond effectively to both traditional and AI-driven threats has already proven crucial for its clients, which include major entities like Ericsson and Salesforce.
CrowdStrike is demonstrating impressive performance metrics: it typically takes just four minutes to detect breaches, and the company boasts a 75% faster mean-time-to-respond compared to previous security measures. Annually, CrowdStrike resolves over 13 million threats, and this figure is expected to increase as more clients join its network.
Financially, CrowdStrike mirrors the growth patterns seen in startup companies. For the fiscal year 2025, the company reported a 31% revenue increase and a 23% growth in annual recurring revenue (ARR). By the third quarter of fiscal 2026, total revenues had risen 22% year-over-year, reaching $1.2 billion, with ARR hitting $4.9 billion—an increase of 23% over the previous year. New ARR grew 73%, indicating a significant influx of customers.
CrowdStrike’s operational metrics are equally promising, with an operating income growth of 32% to $265 million and a diluted earnings per share increase of 26%. The company enjoys a gross profit margin of 81% and an operating margin of 21%. It also maintains a healthy balance sheet, with total debt at roughly $818 million against cash reserves of $4.8 billion, providing ample resources for continued investment and growth.
With projections indicating that CrowdStrike’s total addressable market (TAM) will more than double from $140 billion in 2026 to $300 billion by the decade’s end, the potential for sustained growth appears strong. Over the past five years, CrowdStrike has outperformed the S&P 500, achieving an annualized return of 18% compared to the index’s 13%. In the last year alone, it has gained 25%, against the S&P 500’s 14%.
Investors eyeing the shifts AI is instigating within the cybersecurity space may find CrowdStrike a compelling option, allowing them to benefit from the burgeoning AI landscape without being directly linked to any one AI-centric company.
