CrowdStrike Holdings Inc (NASDAQ:CRWD) will need to go into the next gear over the coming weeks and months to curtail the damage to its brand stemming from Friday’s outage, Wedbush analysts say.
An update from the cybersecurity company resulted in a major IT outage, impacting businesses, airports and consumers globally.
“This is clearly a major black eye for CrowdStrike and the stock will be under pressure after this global outage related to Microsoft has caused massive disruption globally,” the analysts wrote.
“This is a technical update and importantly not a hack/cyber security threat which would be more worrying.”
CrowdStrike shares plunged almost 13% shortly after the stock market opened in New York, while Microsoft was down 0.6%.
The analysts wrote that while CrowdStrike has become a household name “not in a good way” and this will take time to settle, this does not change their positive long-term view of CrowdStrike or the cybersecurity sector.
“It could create opportunity for some competitive displacements but this will take time to determine the path of CIOs and companies looking ahead and related legal actions related to this outage,” they wrote.
This is less of an issue for Microsoft given the reports of technical issues for Windows computers globally, according to Wedbush.
“The ‘blue screen of death’ for Microsoft users is all related to this technical update from CrowdStrike,” they added.
“In a nutshell, this is PR nightmare for CrowdStrike and Microsoft and others get caught in this tornado along with millions of people currently stranded at airports around the globe.”