Morgan Stanley Downgrades CrowdStrike, Citing Valuation Concerns

Morgan Stanley analysts have downgraded CrowdStrike Holdings Inc. (CRWD) to equal weight from overweight, signaling the stock may have peaked after a 50% rally since April. Analyst Keith Weiss acknowledged CrowdStrike's leadership in cybersecurity and AI-driven growth potential but cautioned that current valuations reflect most near-term upside.

The downgrade follows similar action by Piper Sandler last week, with both firms noting the stock appears fully priced despite strong fundamentals. CrowdStrike shares have declined 5% since hitting resistance at $513, underperforming the broader cybersecurity sector which has gained 78% year-to-date.

Forecasts suggest a temporary 10% earnings dip in fiscal 2026 before a projected 33% rebound in 2027, with revenue expected to grow at a 22% annual clip. The market now awaits CrowdStrike's upcoming earnings report for confirmation of these revised estimates.