An onslaught of cyberattacks on Chinese AI startup, DeepSeek unleashed a surge in cybersecurity shares, giving CrowdStrike Holdings (CRWD) the status of S&P 500's second top-performing stock on Tuesday. The boost is believed to come from increasing investor interest in the cybersecurity sector, prompted by the recent attack.
DeepSeek, earlier making headlines for claiming its AI system operates on lesser-advanced chips and at a reduced cost than U.S. competitors like OpenAI, temporarily suspended new registrations following large-scale attacks on its services. This incident spurred a 10% increase in CrowdStrike shares, which became the most successful Nasdaq Composite stock. Other cybersecurity corporations like CloudFlare (NET) noted a 10% rise in shares, Zscaler (ZS) saw a nearly 7% increase, CyberArk (CYBR) rose over 4%, and Palo Alto Networks (PANW) went up by over 2%.
CrowdStrike took another leap as its Falcon cybersecurity platform hit a perfect score in a recent real-world ransomware test, according to the company's announcement on Tuesday. The platform halted all recognized and unrecognized threats without any false positives, bagging a top rating from cybersecurity software testing agency, SE Labs.
Market analysts at JMP Securities maintained a "market outperform" rating for CrowdStrike, keeping a $400 price target, a figure below the company's recent nearly record intraday high of $410. Meanwhile, the mean price target by Visible Alpha is approximately $395.
JMP Securities declared CrowdStrike and its competitor Palo Alto Networks as "strong contenders to capitalize on the securing of AI infrastructure and data." CrowdStrike's shares have witnessed about 40% rise in the past 12 months.