Key points:

  • CrowdStrike shares fell 13% after Wall Street analysts downgraded the stock due to concerns about the impact of a global cyber disruption.
  • The outage was caused by an incorrect CrowdStrike software update that affected 8.5 million Windows devices worldwide.
  • The US House Homeland Security Committee has summoned CrowdStrike’s CEO to a hearing regarding the outage.

Shares of cybersecurity company CrowdStrike fell 13% Monday, extending their decline after Wall Street analysts downgraded the stock. The downgrade comes amid concerns about the financial impact of last week’s global cyber disruption.

Companies are counting losses from Microsoft failure

The outage was caused by an incorrect update of CrowdStrike’s security software, which caused computers running the Microsoft Windows operating system to stop working. As a result, internet services were disrupted around the world, affecting a wide range of industries including airlines, banking and healthcare.

Microsoft said the outage, caused by an incorrect CrowdStrike software update, affected about 8.5 million Windows devices.

Analysts believe that CrowdStrike, as an industry leader, will be able to recover from the incident. However, concerns remain about potential damage to the company’s reputation, negative impact on new contracts, increased competition and possible litigation.

At the same time, shares of CrowdStrike rival SentinelOne rose 11% on Monday. J.P. Morgan called SentinelOne “the most obvious beneficiary” of the event, which analysts said was the largest IT disruption in history.

CrowdStrike shares fell 11% on Monday, July 22, closing at $265.24. At least six brokerages cut their price targets on CrowdStrike shares, and two more downgraded their ratings from buy to neutral.

As services across industries have been restored, companies are still counting losses from delays, canceled flights and other issues. This incident raises important questions about how to prevent similar failures in the future and whether it is worth concentrating the development of such important software in the hands of a few companies.

US Congressional Panel Calls on CrowdStrike CEO to Testify

The House Homeland Security Committee has sent a letter to CrowdStrike CEO George Kurtz demanding testimony about last week’s global technology outage.

“While we appreciate CrowdStrike’s response and coordination with stakeholders, we cannot ignore the magnitude of this incident, which has the potential to be the largest IT disruption in history,” the congressional panel wrote in its letter to Kurz.

The call for the hearing reflects growing concern that the outage, caused by a flawed CrowdStrike software update, could have far-reaching consequences for businesses and government agencies.

Analysts believe that CrowdStrike, as an industry leader, will be able to recover from the incident. However, concerns remain about potential damage to the company’s reputation, negative impact on new contracts, increased competition and possible litigation.