1. Taiwan Semiconductor Manufacturing At first glance, a chipmaker like Taiwan Semiconductor Manufacturing (TSM -1.71%) might not seem like an AI company, but it's just as important to the technology as virtually any other company you can name. TSMC, as it's also known, is at the source of the AI pipeline, producing the chips that power some of the most crucial components. When you think of companies like Nvidia, which designs the graphics processing units (GPUs) and accelerators for the data centers that m ...

Core Insights - CrowdStrike (CRWD) is expanding its focus to secure the use of artificial intelligence (AI) in enterprises, addressing new risks associated with AI agents in business operations [1][2] Group 1: Company Strategy and Innovations - CrowdStrike views the security of AI agents and systems as a significant growth opportunity, launching initiatives to enhance its offerings in this area [2] - The company has expanded Falcon Shield to secure AI agents developed with OpenAI's ChatGPT Enterprise and Codex, enabling organizations to monitor AI activities and mitigate risks [2][10] - A new AI detection engine, Signal, has been introduced to identify unusual patterns in customer environments, aiming to catch threats that traditional systems may overlook [3][10] - CrowdStrike has also enhanced its AI Security Services with new offerings, including AI Systems Security Assessment and AI for SecOps Readiness, to help organizations assess AI risks and prepare security teams for safe AI integration [4][10] Group 2: Market Position and Competitors - As AI adoption increases, CrowdStrike's strategy of expanding its product portfolio and focusing on platform innovation is expected to drive revenue growth, with a Zacks Consensus Estimate of $4.78 billion for fiscal 2026, reflecting a year-over-year growth of 20.9% [5] - Competitors like Palo Alto Networks (PANW) and SentinelOne (S) are also expanding their platforms and innovating with AI, with PANW reporting a 32% year-over-year increase in its Next-Gen Security annual recurring revenue [6] - SentinelOne achieved a 24% year-over-year growth in its annual recurring revenue, driven by the adoption of its AI-first Singularity platform [7] Group 3: Financial Performance and Valuation - CrowdStrike's shares have increased by 22.4% year to date, outperforming the Security industry's growth of 7.4% [8] - The company trades at a forward price-to-sales ratio of 19.53X, significantly higher than the industry's average of 11.96X [11] - The Zacks Consensus Estimate for CrowdStrike's fiscal 2026 earnings indicates a year-over-year decline of 10.9%, while fiscal 2027 earnings are expected to grow by 34.7% [14]

Core Insights - Zscaler and CrowdStrike have expanded their partnership to modernize endpoint detection and response for customers, integrating their platforms to enhance security [1][4][5] - The collaboration aims to replace legacy endpoint products with a cloud-native architecture that features AI-powered detection and integrated security operations [3][5] - The combined solution is expected to improve threat detection accuracy and response times, providing a multi-layered defense against cyber threats [2][5] Company Developments - Zscaler's Zero Trust Exchange™ platform will be integrated with CrowdStrike's Falcon platform and Red Canary's agentic-AI driven security operations to deliver enhanced protection [1][2] - The partnership is built on a successful multi-year collaboration, enhancing managed detection and response (MDR) services and optimizing security investments for customers [4][5] - The integration is designed to help organizations standardize their security architectures and improve operational efficiency [3][5] Industry Trends - Organizations are increasingly moving away from legacy endpoint vendors in favor of comprehensive platform solutions that offer elite protection [5] - The collaboration between Zscaler, CrowdStrike, and Red Canary represents a significant shift towards AI-driven security operations in the cybersecurity landscape [5]

Core Insights - The investor adopts a contrarian investment style, focusing on high-risk, illiquid options and shares, with a balanced portfolio of approximately 50% in each [1] - The investment strategy involves identifying stocks that have recently experienced sell-offs due to non-recurrent events, particularly when insiders are buying shares at lower prices [1] - Fundamental analysis is employed to assess the health of companies, their leverage, and to compare financial ratios with sector and industry averages [1] - Technical analysis is utilized to optimize entry and exit points, using multicolor lines for support and resistance levels on weekly charts [1] Investment Strategy - The investor's timeframe for holding positions typically ranges from 3 to 24 months [1] - A professional background check is conducted on each insider who purchased shares after a recent sell-off to ensure credibility [1] - The investor screens through thousands of stocks, primarily in the US, but may also invest in companies from less stable economies [1]

Group 1: Core Insights - Wedbush Securities has added CrowdStrike, Roblox, GE Vernova, and Nebius to its IVES AI 30 list, which highlights companies expected to shape the AI industry in the coming years [1][2] - The IVES AI 30 list was initially launched in May, featuring major companies like Apple and Nvidia, along with Chinese firms such as Alibaba and Baidu [1] - The firm also launched the Dan Ives Wedbush AI Revolution ETF focused on artificial intelligence [1] Group 2: Newly Added Companies - **CrowdStrike (CRWD.US)**: The company is demonstrating strategic advantages in capitalizing on the AI revolution through modular expansion in its core cybersecurity business, particularly with its data protection module and Charlotte AI product [1] - **Roblox (RBLX.US)**: The platform has created an attractive incentive system for developers, and its AI-driven discovery mechanism is expected to drive user growth and enhance monetization capabilities in the coming quarters [2] - **GE Vernova (GEV.US)**: The company is strategically positioned in the grid management solutions sector, benefiting from the surge in electrification demand driven by large-scale data center construction [2] - **Nebius (NBIS.US)**: The demand for the company's AI infrastructure services remains strong, with plans to expand data center capacity in the coming years, as service demand exceeds current supply capabilities [2] Group 3: Removed Companies - **C3.ai (AI.US)**: The company is facing significant financial impacts due to a sales team restructuring and the resignation of CEO Thomas Siebel, leading to a belief that its development is encountering a slowdown, although long-term prospects remain optimistic [2] - **CyberArk (CYBR.US)**: The company was removed from the list following the announcement of a $25 billion acquisition by Palo Alto Networks, which is already part of the IVES AI 30, thereby strengthening its market position [2] - **Adobe (ADBE.US)**: The company is experiencing disruptive impacts from AI technology on its product lines, which may affect growth trajectories and free cash flow generation, with a slower-than-expected AI transformation [3] - **Elastic (ESTC.US)**: Despite increased government spending on software and AI, the company's public sector business shows signs of slowing down, leading to the identification of more promising alternatives for the IVES AI 30 list [3]

Core Viewpoint - CrowdStrike Holdings (NASDAQ: CRWD) is experiencing a mixed market response ahead of its fiscal second-quarter earnings report, with analysts divided on the company's near-term performance outlook [1][2][3]. Group 1: Stock Performance - As of midday Monday, CRWD stock is trading at $424.90, showing a year-to-date gain of 24% but has seen a pullback from August highs due to concerns raised by peer Fortinet's earnings [1]. - The stock price forecast from Evercore ISI has been lowered to $425 from $440, indicating a cautious stance ahead of earnings [3]. Group 2: Earnings Expectations - Analysts anticipate that CrowdStrike will report earnings of $0.83 per share on revenue of $1.15 billion for the fiscal second quarter, reflecting a 19% increase in revenue compared to the same period last year [2]. Group 3: Analyst Ratings and Outlook - Evercore ISI has placed CRWD on its tactical Underperform list, citing subdued channel checks and mixed feedback regarding the Falcon Complete Platform renewal cycle [3][4]. - In contrast, Cantor Fitzgerald maintains an Overweight rating, projecting an 8% year-over-year growth in new annual recurring revenue for fiscal 2026 [5]. - Citizens JMP has reaffirmed a Market Outperform rating, highlighting CrowdStrike's strong position in endpoint protection [5]. Group 4: Credit Ratings - Moody's Ratings has kept its Baa3 senior unsecured rating for CrowdStrike but upgraded its outlook to Positive from Stable, attributing this to accelerating subscription revenue and improvements in profitability [6]. Group 5: Market Sentiment - According to TipRanks, 40 Wall Street analysts rate CrowdStrike as a Moderate Buy, with an average 12-month price target of $496.59, suggesting a potential upside of about 16% from the current price [9]. - Jim Cramer has expressed a bullish sentiment towards the company, despite its high valuation [10].

Industry Overview - The cybersecurity market is projected to witness a CAGR of 12.63% from 2025 to 2030, driven by the rise of complex attacks such as credential theft and social engineering [2] Company Profiles CrowdStrike - CrowdStrike specializes in endpoint protection and extended detection and response (XDR) through its Falcon platform, which is recognized as the industry's first multi-tenant, cloud-native security solution [4] - The Falcon platform offers 29 cloud modules categorized under Endpoint Security, Security & IT Operations, and Threat Intelligence, with subscription-based sales increasing from 72% in fiscal 2017 to 95% in fiscal 2025 [5] - Despite robust revenue growth, CrowdStrike's growth rate has decelerated from over 35% year-over-year until fiscal 2024 to 29% in fiscal 2025, with further estimates suggesting a decline to around 21% for fiscal 2026 and 2027 [6] - Rising costs are a concern, with R&D expenses increasing 12-fold and S&M expenses nearly ninefold to $1.52 billion in fiscal 2025 from $173 million in fiscal 2019 [7] - The Zacks Consensus Estimate for CrowdStrike's fiscal 2026 earnings indicates a year-over-year decline of 10.9% [8] Qualys - Qualys is a leading provider of Vulnerability Management, Detection and Response (VMDR) solutions, with a growing customer base and a net dollar retention rate of 104% [11] - The company has expanded its portfolio with new product launches, including the Risk Operations Center and enhancements to its TotalAI solution [12] - Qualys' channel partner program has driven revenue growth, with channel revenues increasing 17% year-over-year compared to 4% growth from direct customers [13] - International revenue growth is at 15% year-over-year, representing 43% of total revenues, allowing for organic expansion without acquisition costs [14] - The Zacks Consensus Estimate for Qualys' 2025 earnings is pegged at $6.35 per share, indicating a year-over-year increase of 3.6% [14] Valuation and Performance - Year-to-date, CrowdStrike shares have appreciated 25.1%, while Qualys shares have declined by 7.9% [17] - Qualys is trading at a forward sales multiple of 6.82X, below the industry average of 11.97X, while CrowdStrike is trading at a forward sales multiple of 19.98X, indicating overvaluation [20] - Qualys holds a Zacks Rank 1 (Strong Buy), making it a more attractive investment compared to CrowdStrike, which has a Zacks Rank 4 (Sell) [24]

Group 1: Inclusion in "IVES AI30" List - CrowdStrike is positioned favorably in the AI revolution, with increasing module expansions and strong trading flows from Charlotte AI driving growth [2] - Roblox offers attractive incentives for developers, and its AI-driven discovery features are enhancing platform adoption, expected to lead to stronger monetization in upcoming quarters [2] - GE Vernova will benefit from the growing demand for electrification as large cloud providers continue to build data centers, providing necessary tools for grid management [2] - Nebius is experiencing strong demand in AI infrastructure, planning to increase data center capacity in the coming years [2] Group 2: Removal from "IVES AI30" List - CyberArk was removed due to Palo Alto Networks' plan to acquire it for $25 billion, as Palo Alto is already on the list [3] - C3.ai was removed following a recent sales organization restructuring and the resignation of CEO Thomas Siebel, which significantly impacts its finances, though analysts remain optimistic about its future [3] - Adobe faces concerns over its growth potential, with worries that its product portfolio may be disrupted by AI, leading to slower growth and free cash flow generation [3] - Elastic's public business growth has slowed, despite incremental funding from the U.S. federal government for software and AI improvements, with analysts favoring other tech companies for the "IVES AI30" list [3]

Group 1 - The current high stock market necessitates a selective approach to portfolio management, with a preference for selling rather than buying stocks [1] - The strategy involves reallocating proceeds into cash or small/mid-cap value stocks until more favorable market conditions arise [1] - The analyst has extensive experience in technology sectors, having worked on Wall Street and in Silicon Valley, and has been advising seed-round startups [1]

Core Insights - Palo Alto Networks is a leader in AI-powered cybersecurity, investing heavily in innovations to maintain its top position against competitors like CrowdStrike [1] - The company is set to release its fiscal 2025 fourth quarter results on August 18, which will provide insights into its AI product portfolio [2] Group 1: AI Product Portfolio - Palo Alto operates three cybersecurity platforms: cloud security, network security, and security operations, integrating AI to enhance automation in threat detection and incident response [3] - The Cortex XSIAM platform exemplifies Palo Alto's AI application, autonomously identifying and eliminating threats, significantly reducing the workload on human cybersecurity managers [4] - A healthcare provider using XSIAM has seen automation resolve 90% of incidents, up from 10%, with the platform's annual recurring revenue tripling year over year during fiscal 2025 Q3 [5] Group 2: Revenue Growth - Palo Alto generated $2.3 billion in total revenue during fiscal 2025 Q3, reflecting a 15% year-over-year increase, an acceleration from the previous quarter's 14% growth [6] - The company's next-generation security segment, which includes AI products, saw a 34% increase in annual recurring revenue, reaching $5.1 billion [7] Group 3: Market Strategy - The trend of "platformization" is helping Palo Alto consolidate its market position, encouraging customers to use its comprehensive security solutions instead of multiple vendors [8] - By the end of Q3, approximately 1,250 of its top 5,000 customers had adopted the platform strategy, marking a 39% year-over-year increase, indicating the effectiveness of this approach [9] Group 4: Stock Valuation - Despite its leadership, Palo Alto's stock is trading at a lower price-to-sales ratio of 13.3 compared to CrowdStrike, which has a higher growth rate [10] - Palo Alto's NGS ARR of $5.1 billion exceeds CrowdStrike's total ARR, growing at a faster rate, suggesting that Palo Alto's stock may be undervalued [11] - The stock is currently 20% below its record high, presenting a potential buying opportunity for long-term investors [12]