HSBC has moved CrowdStrike Holdings (NASDAQ:CRWD) off its Hold list and into a Buy rating, assigning a price target of $446.00 - a valuation that implies roughly an 8.4% upside from the stock's then-current level of $411.54. The brokerage firm framed the change around CrowdStrike's position in mission-critical cybersecurity and the multiple levers it has to grow its business.
HSBC pointed to CrowdStrike's cloud-native architecture and its scale as a foundational edge for AI/ML-driven threat detection. The bank noted the company continuously ingests threat signals across its entire customer base, a structural input that it views as advantaging the firm's threat-detection capabilities.
The upgrade is consistent with recent top-line performance. CrowdStrike reported total revenue of $4.57 billion over the trailing twelve months, equal to a 22% increase year-over-year. HSBC's financial outlook for the company is aggressive: it forecasts a non-GAAP EPS compound annual growth rate of 38.3% for fiscal years 2026 through 2029. That EPS trajectory is predicated on a projected revenue CAGR of 27.5% across the same period and an anticipated non-GAAP operating margin expansion of 775 basis points.
Third-party data referenced by HSBC shows analysts estimating an EPS of $3.78 for fiscal 2026, and notes that the company is scheduled to report its next quarterly results on March 3. HSBC also contrasted CrowdStrike's projected non-GAAP operating margin for calendar year 2026 - 21.6% - with the 40%-plus margins typical of other established software companies, saying there is meaningful runway for margin improvement. That expectation underpins part of HSBC's rationale for the stock's premium valuation, which the bank quantified at 81.2 times CY26 non-GAAP earnings per share versus a sector median of 22.4 times.
Despite the upgrade, external data noted that CrowdStrike had traded above its Fair Value metric and that the stock had declined about 12.2% year-to-date at the time of the assessment. InvestingPro data also highlighted that the firm had not been profitable over the last twelve months, though analysts are projecting a return to profitability in the current year.
Beyond the rating change and financial outlook, CrowdStrike has continued to pursue strategic actions intended to bolster its platform and international reach. The company announced its intent to acquire Seraphic, a specialist in runtime browser security, marking a second acquisition in as many weeks following plans to acquire SGNL. HSBC and other observers described these deals as targeted enhancements to the company's platform capabilities.
Concurrently, CrowdStrike said it signed a memorandum of understanding with Aramco to support long-term cybersecurity investments. That agreement was presented as aligning with Saudi Arabia's focus on artificial intelligence initiatives. The company also disclosed plans to expand its Global Data Sovereignty initiative by deploying new cloud infrastructure in Saudi Arabia, India and the United Arab Emirates to provide local data residency options while retaining access to its global threat intelligence network.
On the analyst front, Cantor Fitzgerald reiterated an Overweight rating for CrowdStrike, Citizens left a Market Outperform rating in place along with a $550.00 price target, and Macquarie maintained a Neutral stance, citing valuation concerns while acknowledging CrowdStrike's strong position in the security platform market. Collectively, these analyst actions and the company's recent strategic moves illustrate an effort to deepen platform capability and broaden geographic reach as part of its growth plan.
The HSBC upgrade and the surrounding developments underscore investor focus on cloud-native security platforms that leverage large-scale data ingestion and AI/ML to detect threats. CrowdStrike's combination of revenue growth, margin expansion forecasts and deal activity formed the basis for HSBC's rating change, while market valuation, recent share performance and past losses remain salient considerations as investors evaluate the stock.