CrowdStrike on Wednesday evening reported better-than-expected quarterly results and better-than-expected forward guidance, only to see its near-record-high stock sell off. The hot money that got in, looking for a Hewlett Packard Enterprise or Dell type post-earnings surge , no doubt booked profits, sending shares down more than 11% to around $664 each. Let them sell. We’re not short-term thinkers. Revenue in CrowdStrike’s fiscal 2027 first quarter increased 26% year over year to $1.39 billion, exceeding the 1.36 billion consensus estimate, according to LSEG. Adjusted earnings per share (EPS) surged 51% to $1.10 in the quarter ended April 30, ahead of the $1.07 estimate, LSEG data showed. CRWD YTD mountain CrowdStrike YTD On top of the beat-and-raise, CrowdStrike announced a 4-for-1 stock split, with trading on a split-adjusted basis expected to begin on July 2. We’re increasing our price target to $750 per share from $650, while maintaining our hold-equivalent 2 rating to give the stock time to settle before we consider calling it a buy. CrowdStrike shares closed at a record high of $782 on Monday. Bottom line Putting the shortsighted stock reaction aside, which we also saw after Tuesday evening’s Palo Alto Networks earnings, CrowdStrike’s strong report added to the body of evidence that artificial intelligence adoption is not a threat to the cybersecurity business, but rather a boon. The idea that enterprise companies across the globe would risk their data by attempting to stand up their own cybersecurity solutions by leveraging an AI model is, indeed, proving fanciful. Those concerns that chopped 30% off cyber stocks earlier this year could not have been more wrong, as Jim Cramer had said all along. CEO George Kurtz called Mythos an “inflection moment,” saying on the post-earnings call that the powerful, yet-to-be-released Anthropic model highlighted the “relevance for defenders in identifying vulnerabilities much faster than before, including the chaining of multiple vulnerabilities to create lethal cyberattacks.” Instead of just releasing Mythos, which proved in testing to be adept at spotting security holes, Anthropic initially made the model available to 11 organizations, including Club names CrowdStrike and Palo Alto Networks . Called Project Glasswing, the initiative is enlisting help to secure Mythos. On Tuesday, Anthropic expanded the effort to include 150 organizations in more than 15 countries. Kurtz said AI is driving demand for security solutions in two ways. First, and the most obvious, is that clients need to secure the AI before they can even deploy it. Companies can’t hand over important access codes to unsecured AI agents, making cyber a key component of AI infrastructure. Second, AI has led to “an explosion in greenfield attack surfaces, each of which needs cybersecurity,” the CEO said. In cyberspeak, greenfield attack surfaces are potential vulnerabilities that arise from deploying brand-new technology. In light of all the data centers in the process of being built, Kurtz said that every player throughout the supply chain is experiencing hyper growth — and, in turn, demand for security. “For the first time in my career, the market’s view of cybersecurity’s role has shifted from being viewed primarily through the lens of risk management, compliance, and protection, to being recognized as a strategic accelerator and a critical enabler of AI adoption.” Put another way, the hyperscalers and neoclouds can order all the hardware they want (or can afford), but it’s the CrowdStrikes and Palo Alto Networks of the world that will allow enterprises to adopt and scale AI solutions safely. Asked about the conversations CrowdStrike is having with customers in recent months, Kurtz said, “The biggest thing for me, when I asked what outcome the customer is looking for, it wasn’t a technology outcome per se. It was, we need to solve the security issue because we want to deploy AI faster. We want to go faster in our business. Our CEO is demanding the adoption of AI. We cannot do it securely.” While the shortage in memory has a bottleneck to the AI infrastructure buildout, it seems that cybersecurity is the gateway to AI deployment. Why we own it Cybersecurity is a must-have for companies in the digital age. Led by co-founder and CEO George Kurtz, CrowdStrike is among the best, along with fellow Club member Palo Alto Networks . The company specializes in endpoint protection through its AI-native platform called Falcon. Competitors: Palo Alto Networks, Fortinet , SentinelOne , Microsoft Portfolio weighting: 2.57% Most recent buy: March 24, 2026 Initiation date: Oct. 16, 2024 Regarding stock splits, we view them as a positive when the price of a single share starts to get prohibitive, as was the case for CrowdStrike. The reason is that investors don’t seem to like the idea of fractional share ownership, so reducing the share price makes the stock feel more accessible. To be sure, stock splits do not create any more value for investors who wake up to four times the number of shares in their portfolio at a quarter of their original per-share cost. We went into this in a bit more detail back when Nvidia split its stock on a 10-for-1 basis roughly two years ago. Guidance For its full fiscal year 2027, CrowdStrike management hiked its outlook. Keep in mind, the earnings guide does not yet account for the announced split. Total revenue is expected to be between $5.91 billion and $5.96 billion, up from the prior range of $5.87 billion to $5.93 billion, and ahead of the expectations of $5.89 billion, according to LSEG. Adjusted EPS is forecast to be between $4.88 and $4.96, up from the previously provided $4.78 to $4.90 range, and also ahead of the $4.86 consensus estimate compiled by LSEG. Annual Recurring Revenue (ARR) is expected to close out the year between $6.53 billion and $6.56 billion, up from the prior forecast of between $6.47 billion and $$6.52 billion, also ahead of the $6.5 billion expected, according to FactSet. For its fiscal 2027 second quarter, CrowdStrike also issued a strong outlook. Total revenue is expected to be between $1.44 billion and $1.44 billion, ahead of the expectations of $1.43 billion, according to LSEG. Adjusted EPS is expected to be between $1.16 and $1.17, essentially in line with estimates compiled by LSEG. ARR is expected to be between $5.79 billion and $5.8 billion, also ahead of the $5.77 billion expected, according to FactSet. (Jim Cramer’s Charitable Trust is long CRWD, PANW. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. 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