Nearly half of enterprise endpoint security systems still need to be upgraded! CrowdStrike (CRWD.US) aims to expand market share, France and Pakistan say long-term growth targets may be conservative

The Zhitong Finance App learned that cybersecurity company CrowdStrike (CRWD.US) believes that as companies gradually phase out traditional security systems, the company still has significant room to expand its share in the endpoint detection and response (EDR) market. After a recent conference call with CrowdStrike investor relations executives, BNP Paribas said that the company's long-term growth opportunities are still considerable, and believes that CrowdStrike's proposed recurring revenue (ARR) targets for FY2030 and FY2035 may even be conservative. CrowdStrike has not adjusted its current financial guidelines at this time. The stock was once up about 1% in early trading on Monday.

Nearly half of the EDR market still uses traditional products CrowdStrike to target replacement needs

CrowdStrike estimates that currently around 48% of the EDR market still uses traditional security products, which provides an opportunity for companies to further compete for market share. The contract period for related enterprise customers is usually around five years, so CrowdStrike is expected to get new customers and orders as existing contracts expire one after another and companies upgrade their cybersecurity systems.

EDR, or Endpoint Detection and Response, is a network security solution that continuously monitors end user devices. It is mainly used to detect and respond to network threats such as ransomware and malware.

BNP Paribas said that CrowdStrike believes that after “Mythos,” the company still has an important opportunity to gain more market share through the EDR business. For CrowdStrike, the modernization of traditional EDR products not only means new customer opportunities, but may also create space for the company to sell more security modules to customers, further driving annual recurring revenue growth.

CrowdStrike is currently proposing to raise ARR to $10 billion by FY2030 and reach a further $20 billion by FY2035. At the same time, the company expects the net increase in ARR to grow by more than 20% in the 2028 fiscal year.

Long-term ARR goals or conservative AI security markets provide more room for growth

BNP Paribas believes that CrowdStrike's long-term growth targets may eventually prove to be conservative. According to the company's long-term goals, it is assumed that CrowdStrike will gain about 3.5% of the AI-related security product market, which is estimated to be around $565 billion. In comparison, CrowdStrike's current share of the relevant market is around 4%.

This means that if CrowdStrike can maintain its current market share rather than being calculated based on the 3.5% share implied by the long-term goal, the company's final revenue scale may exceed the level corresponding to the existing long-term goal.

In addition to traditional endpoint security services, the rapid spread of AI applications is also creating new demand for the cybersecurity industry. As enterprises increasingly deploy AI agents, how to monitor the behavior of AI agents and prevent them from performing malicious or unauthorized operations is becoming a new security challenge.

CrowdStrike is also currently actively developing security products for AI agents, hoping to extend its existing cybersecurity capabilities to AI applications.

Guardian products in the field of AI smart device security have been fully launched

BNP Paribas said that CrowdStrike's Guardian products are now fully marketed, while SafeMind, another product, uses Nvidia (NVDA.US)'s Nemotron model to detect possible malicious behavior of AI agents. This layout means that CrowdStrike is further expanding its security platform from traditional terminal devices to AI agents to provide security protection for enterprises using generative AI and autonomous AI systems.

As AI agents are able to access enterprise data, call software tools, and perform increasingly complex tasks, their potential security risks also increase. CrowdStrike wants to compete in this emerging AI security market by identifying abnormal or malicious behavior through related products.

Notably, Nvidia also recently released its own security products. However, CrowdStrike told BNP Paribas that SafeMind's position is not in direct competition with Nvidia's newly launched security products. Instead, SafeMind itself uses Nvidia's Nemotron model, reflecting CrowdStrike's preference for developing security solutions for enterprise customers using existing AI infrastructure and model capabilities in the field of AI security.

BNP Paribas believes that CrowdStrike's long-term goals of achieving 10 billion US dollars of ARR by fiscal year 2030 and 20 billion US dollars of ARR by fiscal year 2035 may be conservative, and whether the company can continue to expand its EDR market share and seize AI security needs will be the key to its long-term growth.