CrowdStrike CRWD is seeing stronger demand for endpoint security as companies expand their use of artificial intelligence (AI) tools and agents. In the second quarter of fiscal 2027, CrowdStrike's endpoint business accelerated for the fourth consecutive quarter. The company said the increase was driven by the growing use of AI on endpoints, including tools such as Claude, Codex and custom agentic applications.
AI usage on endpoints is growing quickly. CrowdStrike said Claude usage across a sample of its customers increased more than 400% in recent months, while custom agent usage grew over 100%. As these tools gain wider use, companies are facing new risks, including code exploitation, data leakage and identity compromise. This is increasing the need to secure AI activity directly on endpoints.
CrowdStrike is also benefiting from customers replacing older endpoint security products. A large financial services firm replaced a next-generation endpoint detection and response product in an eight-figure Falcon Flex deal covering more than 100 entities and hundreds of thousands of endpoints. The customer selected CrowdStrike’s platform for detection coverage, ease of deployment and lower endpoint impact.
There is still room for further endpoint adoption. Management said about half of the market continues to use legacy antivirus products, which may not be designed to identify rogue AI agents or shadow AI. As enterprises move more AI workloads to employee devices, CrowdStrike could have more opportunities to win new customers and expand within its existing base. This could keep endpoint demand growing as AI adoption increases.
The Zacks Consensus Estimate for fiscal 2027 and 2028 indicates revenue growth of 24.8% and 22.6%, 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.
PANW is expanding its endpoint security capabilities as AI tools and autonomous agents become more common on employee devices. Following its acquisition of Koi, the company is developing an agentic endpoint security strategy to monitor AI activity and prevent unauthorized actions. PANW aims to provide visibility from the initial prompt to the final action and block threats as they occur. The company reported more than 100 customer wins in the fourth quarter of fiscal 2026 for its agentic endpoint strategy, representing a 2.5-fold increase since completing the Koi integration.
SentinelOne is also targeting the endpoint security market through its Singularity Endpoint platform, which provides endpoint detection and response (EDR) with automated threat detection and remediation. The company sees an opportunity to replace legacy antivirus products, noting that nearly half of the sector still relies on these older tools. In the second quarter of fiscal 2027, a major government agency selected Singularity EDR after evaluating its real-time detection, autonomous response and total cost of ownership. SentinelOne also reported a deal with an international retailer that replaced a legacy endpoint vendor while expanding its use of the Singularity platform.
CRWD’s Price Performance, Valuation & Estimates
Shares of CrowdStrike have surged 94% in the year-to-date period compared with the Zacks Security industry’s appreciation of 83.8%.
CRWD’s YTD Price Return Performance
Image Source: Zacks Investment Research
From a valuation standpoint, CrowdStrike trades at a forward price-to-sales ratio of 33.41, significantly higher than the industry’s average of 17.97. The Zacks Value Score of F suggests that CRWD stock is overvalued.
CRWD’s 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 remained unchanged over the past 30 days.
Image Source: Zacks Investment Research
CrowdStrike currently has a Zacks Rank #5 (Strong 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).