This title could explode like Nvidia thanks to the evolution of artificial intelligence. By 2035 its market cap could grow by 1,370%.
In recent years, the technology sector has seen some companies reach incredible market capitalization levels, exceeding trillion dollars. Giants like Microsoft, Apple, Nvidia, Alphabet and Amazon have achieved (and surpassed) this prestigious status, supported by the boom in artificial intelligence. However, there is a new contender that may be joining this exclusive group, a cybersecurity-focused company that is rapidly gaining traction: CrowdStrike.
Let’s analyze why this stock is worth buying before the market cap grows by 1,370%.
CrowdStrike
CrowdStrike has seen unstoppable success thanks to its leadership in endpoint security and a broad range of security products. The company has long adopted artificial intelligence to detect and repel the most advanced threats, with a system that becomes increasingly intelligent with each attack faced. Therefore, AI is deeply integrated into the company’s DNA, making it a formidable contender in the cybersecurity market.
With a current market capitalization of less than $73 billion, it might seem unrealistic to think that CrowdStrike could join the trillion-dollar club. For the company, it would mean a market cap growth of 1,370%. However, the growing need to defend against AI-powered cyber attacks could give the company the push it needs to achieve this goal.
The Falcon platform is at the heart of CrowdStrike’s success. It uses advanced artificial intelligence and machine learning to stop threats in seconds and prevent future attacks. This system is trained on over 2 trillion threat events per day, constantly improving over time. The platform has proven its effectiveness, with annual recurring revenues increasing 34% to $3.44 billion, and expanding operating margins that brought diluted earnings per share (EPS) to grow by 102%.
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The path to $1 trillion
Despite its success and impressive growth, reaching a $1 trillion market capitalization takes time and persistence. CrowdStrike has been recognized as a Leader in Gartner’s Magic Quadrant for Endpoint Protection and has received numerous awards for its strategy and execution capabilities. However, maintaining a steady growth rate will require expanding your customer base and introducing new products and services.
Fortune Business Insights predicts a compound annual growth rate of 14% for the cybersecurity industry, through 2030.
To reach the $1 trillion goal, CrowdStrike would need to generate revenues of approximately $42 billion per year, assuming a constant price-to-sales ratio of 24. If the company can maintain a growth rate of 33% per year, it could reach its goal by 2033. However, a more realistic growth rate of 27% could lead to reaching this milestone by 2035.
The growing demand for cybersecurity, with damage from cyberattacks expected to hit $10.5 trillion by 2025, presents CrowdStrike with a significant opportunity. If the company can capture even a portion of this fast-growing market, it could join the trillion-dollar club.
|DISCLAIMER
The information and considerations in this article should not be used as the sole or primary basis for making investment decisions. The reader maintains full freedom in his own investment choices and full responsibility in making them, since he alone knows his risk propensity and his time horizon. The information contained in the article is provided for informational purposes only and its disclosure does not constitute and should not be considered an offer or solicitation to the public for savings.|
Original article published on Money.it Italy 2024-04-28 14:07:00. Original title: Un titolo da valutare prima che il market cap cresca del 1.370%
