It is undeniable that artificial intelligence (AI) is changing the technology landscape as we know it. This is reflected in the number of AI-related technology companies that are among the most valuable companies in the world based on market capitalization.
Microsoft is at the top of the list and is the only company with a market cap of more than $3 trillion. It snatched the crown from him Applewhich remains in second place with $2.6 trillion. Nvidiapowered by its world-class AI processors, has grown 200% over the past year and is in third place with just over $2 trillion. alphabet, AmazonAnd Metaplatforms – each with a strong connection to AI – sports market caps between $1.2 trillion and $1.9 trillion.
With a market cap of less than $73 billion as of this writing, it might seem like heresy to assume this CrowdStrike (NASDAQ:CRWD) could have a shot at the $1 trillion club. However, the need to defend against AI-powered cybersecurity attacks will only increase from here on out. CrowdStrike’s ever-improving algorithms and cloud-native platform form the foundation of the company’s success, suggesting that it is only a matter of time before it joins this exclusive community.
AI in its DNA
According to a report by, the global average cost of a data breach in 2023 was $4.45 million IBM, and this amount grows every year. With increasing risks and enormous potential for business disruption, cybersecurity has become one of the most important aspects for every organization. This is where CrowdStrike comes into play.
The company’s Falcon platform provides the industry’s most advanced threat protection, leveraging advanced AI and machine learning to stop threats in seconds while preventing future attacks. The system is trained on more than 2 trillion threat events per day and its AI-powered system improves with every encounter. CrowdStrike has grown beyond its endpoint security roots to offer a growing range of products including cloud security, identity security, security information and event management, threat intelligence, data protection and threat management services.
The proof is in the pudding, they say. In the fourth quarter of fiscal 2024 (ended January 31), CrowdStrike’s revenue increased 33% year-over-year to $637 million and diluted earnings per share increased 102% thanks to expanding operating margin. At the same time, the company’s annual recurring revenue rose 34% to $3.44 billion. Additionally, customers are adopting a greater number of modules, as the number of customers with five, six, or seven modules increased by 64%, 43%, and 27%, respectively. Degrees with eight or more modules have more than doubled.
Management expects the company’s robust growth to continue, with the midpoint of its guidance calling for fiscal 2025 revenue of $3.96 billion, representing growth of approximately 29%. It’s worth noting that CrowdStrike has historically provided conservative guidance, so actual results could potentially be higher.
The combination of the growing cybersecurity market and CrowdStrike’s expanding offering of security services increases the company’s market opportunities. Management estimates the company’s total addressable market (TAM) at $100 billion, growing to $225 billion by 2028.
The Path to $1 Trillion
CrowdStrike is one of the most talked-about names in cybersecurity, with a growing offering of security solutions spanning more than a decade.
In 2023, CrowdStrike was named the market leader gardenerFor the fourth consecutive year, the company received top honors in the 2023 Magic Quadrant for Endpoint Protection for the completeness of its vision and its ability to execute. CrowdStrike was also named a leader in cloud workload security ranger Wave Report for the first quarter of 2024, which ranked CrowdStrike highest among all vendors in strategy and received the highest possible ratings for vision and innovation. Despite its long and growing list of industry accolades, the company needs to continue to thrive, and it will take time to join the ranks of trillionaires.
For fiscal year 2024 (ended January 31), CrowdStrike had revenue of $3.06 billion, which corresponds to a price-to-sales (P/S) ratio of approximately 24. Assuming the P/S remains constant, CrowdStrike would need to grow its revenue to about $42 billion per year to support a $1 trillion market cap. For comparison, Wall Street is forecasting revenue of $3.97 billion for the 2025 fiscal year and $5.03 billion for the 2026 fiscal year, so revenue of this magnitude is still a long way off.
If the company was able to maintain its 33% year-over-year growth rate, CrowdStrike could reach the $1 trillion market cap threshold by 2033. However, sustaining this level of growth for a decade would be a major challenge. If we lower the average revenue growth rate to a more modest 27%, CrowdStrike could achieve this possibly reach a market capitalization of $1 trillion by 2035.
There is reason to believe that the need for strong cybersecurity solutions will continue. According to data compiled by McKinsey & Company, damage from cyberattacks is expected to reach $10.5 trillion by 2025, up 300% over the last decade. The total addressable market for security solutions is expected to grow to $1.5 trillion to $2 trillion over the next 20 years or so, about 10 times the current market size.
If CrowdStrike can capture even a small portion of this growing market opportunity, it could soon join the $1 trillion club.
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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister of Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Danny Vena has positions at Alphabet, Amazon, Apple, CrowdStrike, Meta Platforms, Microsoft and Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, CrowdStrike, Meta Platforms, Microsoft and Nvidia. The Motley Fool recommends Gartner and International Business Machines and recommends the following options: long $395 January 2026 calls on Microsoft and short $405 January 2026 calls on Microsoft. The Motley Fool has a disclosure policy.
1 Unstoppable Stock That Could Join Microsoft, Apple, Nvidia, Alphabet, Amazon and Meta in the $1 Trillion Club was originally published by The Motley Fool