CRWD vs. CSCO: Which Cybersecurity Stock Should You Buy Right Now?
CRWD vs. CSCO: Which Cybersecurity Stock Should You Buy Right Now?
Publish Date: 2026-07-14 10:13:00
Source Domain: www.theglobeandmail.com
Using an unordered list, summarize the following article with between 4 and 8 key points. CrowdStrikeCRWD and Cisco SystemsCSCO are well-known players in the cybersecurity domain. While CrowdStrike specializes in endpoint protection and extended detection and response, offering AI-native cloud security through its Falcon platform, Cisco Systems is growing its presence based on Threat Intelligence, Detection and Response offerings, which include the offerings from Splunk and Network Security.Both CRWD and CSCO are riding the key industry trends, driven by the mounting incidents of credential theft, remote desktop protocol breaches and social engineering-based strikes by malicious actors. However, from an investment point of view, one stock offers a more favorable outlook than the other right now. Let’s break down their fundamentals, growth prospects, market challenges and valuation to determine which stock offers a more compelling investment case.The Case for CrowdStrike StockCrowdStrike provides its cybersecurity services mainly through its Falcon platform. CrowdStrike’s Falcon platform is renowned for being the industry’s first multi-tenant, cloud native, intelligent security solution. The Falcon platform helps secure workloads across on-premise, cloud-based and virtualized environments running on several endpoints, such as desktops, laptops, servers, virtual machines and IoT devices.CrowdStrike’s cloud-based Falcon platform currently provides 33 cloud modules via a software-as-a-service subscription model that is categorized under three categories: Endpoint Security, Security & IT Operations and Threat Intelligence. The share of subscription-based sales to CrowdStrike’s total revenues grew from 72% in fiscal 2017 to 95% in fiscal 2026.CrowdStrike’s Falcon Flex subscription model is becoming an important driver of its growth. Falcon Flex makes it easier for customers to access multiple modules of the Falcon platform through a single contract. This makes it easier for customers to deploy additional security products over time and expand their use of the Falcon platform, which has now become the company’s primary go-to-market model.In the first quarter of fiscal 2027, Annual recurring revenue (ARR) from Flex accounts crossed $1.9 billion, up more than 99% year over year, which shows strong adoption across enterprise customers. In the first quarter of fiscal 2027, CrowdStrike added more than 300 Flex customers and ended the first quarter with over 1,900 customers who have adopted Falcon Flex.However, CrowdStrike’s recent quarterly reports have shown a deceleration in its growth rate. The company’s revenue growth, while still robust, is not as explosive as in previous years. CrowdStrike had enjoyed more than 35% year-over-year top-line growth till fiscal 2024. The growth rate decelerated to 29% in fiscal 2025 and to 22% in fiscal 2026. For fiscal 2027, CrowdStrike expects total revenues to be in the range of $5.915 billion to $5.959 billion. This indicates that the top-line growth is expected to stay around 23% to 24%, which is way lower than the explosive growth enjoyed by the company in the previous years.The Case for CSCO StockCisco Systems’ security business is witnessing strong momentum. The company’s core security portfolio, excluding Splunk, delivered double-digit order growth, while Firewall orders grew at a double-digit rate in the third quarter of fiscal 2026. Management expects the organic Cisco security business to approach double-digit revenue growth by the end of fiscal 2026.Cisco is also expanding its AI security offerings. During the quarter, more than 1,000 new customers purchased products such as Secure Access, XDR, Hypershield and AI Defense, bringing the total number of new customers for these offerings to about 5,000 since launch. The company also expanded its Secure AI Factory with NVIDIA to help customers deploy AI securely across their infrastructure. Cisco introduced Zero Trust Access for AI Agents, launched DefenseClaw to protect AI agents from attacks and announced plans to acquire Galileo and Astrix to strengthen AI identity, access management and behavior monitoring.Demand for AI is increasing the need for stronger cybersecurity. More companies are looking to secure AI applications and protect their data and infrastructure. Cisco believes this trend will support demand for its newer security products. The company expects to add more than 1,000 new Splunk customers in fiscal 2026. Robust adoption of the newer offerings, along with the planned acquisitions, should further strengthen CSCO’s security business.The above-mentioned factors show that Cisco’s newer security products are gaining customers, while its firewall business continues to perform well. If demand remains strong, CSCO’s security business could become a bigger contributor to the company’s overall growth over the next few quarters.CRWD vs. CSCO: Earnings Estimate TrendThe earnings estimate revision trend for the two companies reflects that analysts are turning more bullish toward CSCO.CRWD Earnings Estimate Revision TrendImage Source: Zacks Investment ResearchCSCO Earnings Estimate Revision TrendImage Source: Zacks Investment ResearchCRWD vs. CSCO: Price Performance and ValuationYear to date, shares of CRWD and CSCO have surged 60% and 54.5%, respectively.CRWD Vs. CSCO: YTD Price Return PerformanceImage Source: Zacks Investment ResearchCurrently, CSCO is trading at a forward sales multiple of 6.96X, significantly lower than CRWD’s forward sales multiple of 29.37X. CSCO’s reasonable valuation makes it more attractive for investors looking for value and stability.CRWD vs. CSCO: Forward 12-Month P/S RatioImage Source: Zacks Investment ResearchConclusion: Buy CSCO, Hold CRWD Right NowBoth CrowdStrike and Cisco Systems are key players in the cybersecurity space, but CrowdStrike is witnessing a slowdown in its sales growth. In contrast, Cisco Systems’ strong security portfolio, driven by robust adoption of its AI security offerings is aiding its top-line growth. Cisco Systems’ reasonable valuation offers some downside protection as well, making the stock an attractive buy, particularly for investors seeking exposure to cybersecurity growth at a fair price.Currently, Cisco Systems sports a Zacks Rank #1 (Strong Buy), making the stock a stronger pick over CrowdStrike, which has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.Beyond Nvidia: AI’s Second Wave Is HereThe AI revolution has already minted millionaires. But the stocks everyone knows about aren’t likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.See Stocks Now >>This article originally published on Zacks Investment Research (zacks.com).Zacks Investment Research
