Why CrowdStrike stock jumped on Monday

Actions of Crowd strike (NASDAQ:CRWD) were trading higher on Monday. The cloud-based endpoint security specialist jumped 9.9% in early trading and was still up 9.1% as of 11:58 a.m. ET.

The catalyst that sent the cybersecurity actions Higher was the announcement of its joining one of the major trading indices.

Join the S&P 500

A statement released after the market closed Friday revealed that CrowdStrike would join the S&P500. Stock will be replaced Robert Moitie when the market opens on Monday June 24. In a press release marking the change, S&P Global noted: “The changes ensure that each index is more representative of its market capitalization range. »

To be eligible to join the S&P 500, a company must be a U.S.-based company with a market capitalization of at least $8.2 billion. Additionally, at least 50% of its outstanding shares must be publicly traded and the company must have been profitable in its most recent quarter and cumulatively profitable over the past four quarters.

Stocks often rebound after being added to one of the major indexes because institutional investors and funds that track these benchmarks must buy the stocks in order to match the composition of the indexes. This does not mean that the underlying society has changed. Rather, it is a recognition that the operational and financial excellence that helped the company meet the eligibility criteria will likely make it a good investment in the future.

Roots in artificial intelligence (AI)

The increased focus on artificial intelligence (AI) over the past year has also shined a spotlight on CrowdStrike, as the company has long used machine learning and other forms of AI to counter the growing number hacks, breaches and other unauthorized schemes. to access.

Just last week, the company continued its incessant journey higher. For its first fiscal quarter 2025 (ended April 30), CrowdStrike generated revenue that increased 33% year over year to $921 million, while its adjusted earnings per share of $0.93 jumped 67%. The company continues to generate strong operating and free cash flow and add new customers.

For these reasons and more, CrowdStrike stock is a buy.

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Danny Vena holds positions in CrowdStrike. The Motley Fool posts and recommends CrowdStrike. The Motley Fool recommends Robert Half. The Mad Motley has a disclosure policy.

Why CrowdStrike stock jumped on Monday was originally published by The Motley Fool

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