Up 90% in 2026, This Cybersecurity Growth Stock Under $300 Is the Best One to Buy Now

CrowdStrike (CRWD) looks like one of the strongest growth stories in cybersecurity right now. It had a lot to prove in the fiscal second-quarter earnings. The company delivered on all three numbers that I flagged ahead of the Q2 print, and in some cases it did much better than expected.  And the stock’s massive 90% gains so far this year reflect that outstanding performance.  

About CrowdStrike

With a market cap of $220 billion, CrowdStrike is a cloud-based cybersecurity company best known for its Falcon platform. The company helps businesses protect endpoints, cloud workloads, identities, and other parts of their technology infrastructure from cyber threats. 

CrowdStrike mostly makes money by selling recurring cybersecurity subscriptions. This business model is attractive, as once customers have deployed its cybersecurity software, switching providers becomes complicated and risky. This advantage shows up in its financials. The company generated 95% of total revenue, or $1.39 billion, just from subscriptions, while professional-services revenue was $71 million in the second quarter of fiscal 2027. Total revenue of $1.47 billion also increased 26% year-over-year (YOY). 

Net New ARR Delivered Far More Than Expected

The first number I recommended watching was net new annual recurring revenue, or ARR, which would show whether CrowdStrike’s growth acceleration was continuing. While management had guided for $284 million to $286 million, CrowdStrike recorded $333 million in net new ARR, representing growth of 51%. Plus, ending ARR reached $5.84 billion, up more than 25%  from the year-ago period. CrowdStrike even raised its full fiscal 2027 net new ARR outlook to $1.35 to $1.36 billion, which would imply a 34% YOY growth at the midpoint. This shows that CrowdStrike’s core business is growing faster than expected.

AIDR is Starting to Look Like a Real Business

The second thing I wanted investors watching was AI security, specifically its AI Detection and Response, or AIDR. In Q1, AIDR ending ARR had grown more than 250% sequentially. In the second quarter, AIDR ending ARR tripled sequentially. CrowdStrike has also been pushing Falcon Flex, a more flexible subscription model that allows customers to consume different Falcon capabilities as their security needs change. In fact, second-quarter ending ARR from customers using Falcon Flex crossed $2.3 billion, increasing 101% YOY. The company even added 935 Flex accounts in just Q2.

Management also stressed that one of the world's largest banks adopted AIDR through an eight-figure Falcon Flex deal, using it for AI visibility and data-exfiltration prevention. CrowdStrike's broader platform is also seeing increased demand as companies try to secure AI deployments. Ending ARR for next-generation SIEM surpassed $695 million, grew more than 34% to $585 million for identity, and was over 185% higher for Falcon Shield. AIDR is a very new product, so these high growth rates are not surprising in the initial stages. The challenge for CrowdStrike is to maintain this momentum.

Profitability Also Passed the Test

The third metric to watch was profitability and free cash flow (FCF). While the company expected FCF margin to decline to 24.5%, it generated $377 million in FCF, equal to a 26% margin, while cash flow from operations reached $530 million.

Adjusted net income also climbed 34% to $323 million, or $0.31 per share. Adjusted gross margin reached 79% while subscription gross margin climbed to 81%. These numbers are important, as they reveal that while CrowdStrike is investing heavily in new areas such as AI security, it isn't sacrificing profits or burdening itself with debt. Revenue is accelerating while margins and cash generation remain strong. The company also ended the quarter with cash and cash equivalents totalling $5.01 billion.

Is CrowdStrike Stock A Buy Now?

CrowdStrike certainly met the high standard set for it. Net new ARR grew, and AI security demand is beginning to translate into actual revenue, while profitability and cash flows remained strong. And it appears that management has raised the bar again with an upbeat outlook for fiscal 2027, implying that the company is seeing enough demand, customer expansion, and pipeline strength to become more confident about the remainder of the year.

While CrowdStrike’s long-term bull case became considerably stronger after Q2, the stock is still trading at a premium. Investors might want to wait for a better entry point to buy this exceptional cybersecurity stock.

On Wall Street, CRWD stock holds a consensus "Moderate Buy” rating. Of the 50 analysts covering it, 33 rate it a “Strong Buy,” while three are moderately bullish, 12 rate it a "Hold," and two say it’s a "Strong Sell." The average target price of $235.27 is 9.4% above current levels. Meanwhile, Argus Research has assigned the high-end price estimate of $425, which implies the stock can climb 98% over the next 12 months. The firm believes the rise of agentic AI could drive greater cybersecurity demand as companies face new AI-related threats. CrowdStrike’s broader security platform and continued product innovation could drive further growth.

On the date of publication, Sushree Mohanty did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.