Will Rising AI Vulnerabilities Boost CrowdStrike's Exposure Business?
CrowdStrike CRWD is seeing stronger demand for its exposure management business as artificial intelligence (AI) increases the number of vulnerabilities that companies need to manage. During the second quarter of fiscal 2027, the company's exposure management business accelerated sequentially. Management said the rise in vulnerabilities found through frontier AI is creating a new challenge because companies cannot patch all exposures fast enough before autonomous attacks can exploit them.
This is increasing the need for tools that help companies prioritize which vulnerabilities require attention first. CrowdStrike's Falcon Exposure Management provides real-time detection and continuous prioritization of exposures. The platform also gives customers a view of their assets, protection status, unpatched exposures and attack paths. Management said these capabilities are helping CrowdStrike displace legacy exposure and vulnerability management vendors.
CrowdStrike is also seeing exposure management become part of broader AI security deployments. A key customer win in the second quarter includes a global religious organization that replaced a legacy vulnerability management product as part of its AI transformation. The customer signed a seven-figure Flex deal and also deployed AIDR to gain visibility and control over its AI usage. This shows how exposure management can support customers as they expand their use of AI.
The growing use of AI could keep adding pressure to traditional vulnerability management tools, especially as attacks move faster. CrowdStrike believes customers need to rethink how they prioritize exposures because they cannot fix everything within the time available. With exposure management becoming part of the company's broader platform strategy, continued growth in AI adoption could support demand for CrowdStrike's exposure management solutions.
The Zacks Consensus Estimate for fiscal 2027 and 2028 indicates revenue growth of around 24.6% and 22.4%, respectively.
How Competitors Fare Against CRWD
Competitors like Palo Alto Networks PANW and SentinelOne S are also gaining ground through platform expansion and AI innovation.
In the third quarter of fiscal 2026, Palo Alto Networks saw robust growth in its Next-Gen Security ARR, which increased 60% year over year. The growth was driven by increased customer adoption of PANW’s advanced cybersecurity offerings, including its AI-driven XSIAM platform, SASE and software firewalls.
Though comparatively a small competitor, SentinelOne posted second-quarter fiscal 2027 year-over-year growth of 22% in its ARR. The growth was fueled by the rising adoption of SentinelOne’s AI-first Singularity platform and Purple AI.
CRWD’s Price Performance, Valuation and Estimates
Shares of CrowdStrike have jumped 115.1% in the year-to-date period compared with the Zacks Security industry’s return of 95%.
CRWD YTD Price Return Performance
Image Source: Zacks Investment Research
From a valuation standpoint, CrowdStrike trades at a forward price-to-sales ratio of 37.54, significantly higher than the industry’s average of 19.24. The Zacks Value Score of F suggests that CRWD stock is overvalued.
CRWD Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for CrowdStrike’s fiscal 2027 and 2028 earnings indicates year-over-year growth of 35.5% and 28.2%, respectively. The estimates for fiscal 2027 and 2028 have been revised up by 8 cents and 3 cents, respectively, over the past 30 days.
Image Source: Zacks Investment Research
CrowdStrike currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
