Falcon Flex Drives Growth as CrowdStrike Bets on AI Security
CrowdStrike Holdings Inc. (NASDAQ: CRWD) stock is up 43% in 2025. That’s about 3x the gains in the S&P 500, making the stock one of the best growth stories in the entire market. Much of this is due to the company's strong revenue growth from its AI-native Falcon platform.
Through its subscription-as-a-service (SaaS) model, CrowdStrike is helping companies take a targeted approach to their cybersecurity needs. This is evident in the company’s impressive year-over-year revenue growth, most of which is in the form of annual recurring revenue (ARR).
However, like many companies in the technology sector, CrowdStrike faces a key obstacle in its valuation. CRWD stock is delivering growth that merits a premium price, but it will take some time for the company to grow into its current valuation.
Falcon Flex Accelerates Adoption Across Cybersecurity Modules
The cybersecurity sector, along with—and largely because of—artificial intelligence (AI), is one of the two most important sectors for investors to own in the next decade. The company’s Falcon Flex platform allows customers to take an a la carte approach to their cybersecurity needs.
As of October 2025, the platform has approximately 30 modules, covering:
- Cloud Security
- Next-Gen Identity
- LogScale Next-Gen SIEM
Most recently, CrowdStrike added Falcon for information technology (IT). These modules provide tools to handle security and IT operations, extending their utility beyond core cybersecurity and adding to the company’s total addressable market (TAM).
In CrowdStrike’s August 2025 earnings presentation, it cited impressive usage statistics regarding module adoption rates:
- 48% of its customers used 6 or more modules
- 33% of its customers used 7 or more modules
- 23% of its customers used 8 or more modules
What’s particularly relevant to these numbers is that the company continues to grow its ARR after offering several of its customers one or more modules for free after the company’s highly publicized outage in the summer of 2024. That means that customers aren’t just sticking with CrowdStrike, they’re adding to their commitments.
Leading Security’s Shift Into the Agentic AI Era
As part of CrowdStrike’s Fal.Con 2025 Investor Briefing, chief executive officer (CEO) George Kurtz declared CrowdStrike to be a leader in what he calls “the Agentic Era.” This is a new phase of cybersecurity designed for a world where artificial intelligence systems act autonomously.
As Kurtz describes it, traditional endpoint protection and even cloud-native defenses are no longer sufficient, because AI itself has become both a target and a potential threat vector. CrowdStrike’s approach is to secure the entire AI stack—from infrastructure and data to software and identities—through a unified platform that protects not just human users, but also machine and agentic identities.
Specifically, the company has launched its new Pangea module, which extends detection and response (DR) to AI environments. It offers “AI Detection and Response” and “AI Guardrails” that monitor model behavior for prompt injection, data leakage, and misuse. This next-generation approach allows security teams to detect anomalies in real time, even when threats arise from the AI models themselves rather than human attackers.
By unifying data, detection, and defense across human and non-human identities, CrowdStrike is positioning itself not only as a cybersecurity leader but as the protector of the AI ecosystem itself. This distinction could define the next decade of growth in the security industry.
Valuation Remains the Only Threat to the Bull Case
Justifiably or not, valuation is a sticking point for CRWD stock investors. The company’s rapid growth has brought with it significant investor interest. However, the stock has become expensive.
At the midpoint of the company’s most recent full-year guidance, it will bring in $3.66 in earnings per share (EPS). But for many investors, that’s not enough to justify a stock price of over $489 per share as of Oct. 7, particularly one with a trailing twelve-month price-to-earnings (P/E) ratio of around 137x, nearly double the sector average.
This is where it’s critical to understand what kind of investor you are as it relates to CrowdStrike. If the company achieves its target of $20 billion in ending ARR by fiscal year 2036, its stock will become significantly more appealing.
In fact, revenue growth of that magnitude, assuming analysts maintain the same revenue multiple, would put CrowdStrike’s market cap between $400 billion and $500 billion, putting it in the same category as the largest cloud/software companies.
But that growth won’t come in a straight line. After hitting its all-time high in July 2025, CRWD stock dropped almost 20% in two months. However, investors who bought that dip have been rewarded with a nice gain of over 14% in the last month, which is expected to last for several quarters.
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