Art of Speculation
Chinese-Language AI Fundamentals & Macro, Concentrated Investing
CrowdStrike is now a clear short rather than a bounce candidate. The weekly chart closed an evening-star bearish reversal on top of a weekly triple-top divergence, and big money is distributing across the cybersecurity sector. A bounce toward the daily 20-day EMA near $204.6 is a shorting area, with risk defined just above it; earnings are close, so caution is warranted. x.com x.comÂ
CrowdStrike at 40x forward sales is hard to take seriously as a best idea into 2027. x.comÂ
CrowdStrike and Palo Alto Networks' strength is an ultra-overcrowded trade that is likely to flip this quarter. x.comÂ
CrowdStrike's pullback reflects traders taking profits, not institutional distribution, with smart money staying invested and institutional support down to $190. Its rejection near prior highs mirrors the software sector and its last three all-time-high attempts. A $10 million purchase of December 2027 $230 calls bets that profit-takers will chase back in harder than ever over the next year. Earnings are next week. x.comÂ
Anthropic and OpenAI's inevitable move into cybersecurity threatens CrowdStrike and Palo Alto Networks' valuations. They look like the market's biggest bubble stocks right now; CrowdStrike trades at 40x ARR despite 25% growth and negative GAAP EBIT. x.com x.comÂ
CrowdStrike's post-earnings rally looks largely like positioning rather than fundamentals, so it is not one to chase or buy. The print was strong, but revenue was revised up only 1% and the stock trades at 30x sales. x.com x.comÂ
CrowdStrike may distinguish itself from an expensive cybersecurity group by showing more breakneck growth at earnings next month. Fortinet's slowing product revenue exposed how much relentless execution investors had priced into the group's extreme multiples, pulling CrowdStrike down in sympathy. CrowdStrike remains in a higher tier than Fortinet, which itself ranks above SentinelOne. x.com x.comÂ
CrowdStrike will need a game-changing report or will probably see a sell-the-news reaction. Palo Alto Networks gave up most of its after-hours gains on a solid but not game-changing beat after a 60% run from its April lows. x.comÂ
CrowdStrike's valuation looks detached from its fundamentals. It is still unprofitable on a GAAP basis, trades at 116x forward earnings, and is growing more slowly than it was in 2021. x.comÂ
CrowdStrike is worth holding through the next cycle because enterprise-scale endpoint security is a fortress every company needs. x.comÂ
CrowdStrike's 45x sales multiple on mid-20% revenue growth only works if multiple expansion continues in perpetuity, which no long holder can count on. x.comÂ
