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Cybersecurity stocks remain an indispensable part of an investment portfolio — no matter what’s happening with global trade. That is Jim Cramer’s takeaway after catching up with the CEO of CrowdStrike on Tuesday night. “There’s a giant pick up in nation-state rouge cyber-attacks, particularly against the federal government, and CrowdStrike is uniquely in a position to be able to get a lot of federal government funding,” Jim said during Wednesday’s Morning Meeting, a day after the interview on “Mad Money” that included a wide-ranging conversation on geopolitical tensions, industry consolidation and CEO George Kurtz’s take on tariffs. The timely interview came at a volatile moment on Wall Street, as investors worried about that President Donald Trump’s tariffs could lead to a recession and squeeze corporate IT budgets as a result, leading to softer demand for software. Even before the recent flare up in trade tensions, investors also were contending with a U.S. government spending pullback and the potential for contract cancellations with software vendors. The trade saga took a positive turn Wednesday afternoon — with stocks surging following a bruising few days — after Trump announced a 90-day tariff pause on at least some countries. Trump also raised the tariff rate on China to 125%. The relief rally was broad based, but some of the especially hard hit corners of the market, including software, were seeing even bigger moves. Cybersecurity stocks also saw big moves. CrowdStrike was up 17% and fellow portfolio name Palo Alto Networks surged almost 14%. Both stocks traded in the green even before Trump’s tariff reprieve. The cybersecurity cohort had generally fared better than other pockets of the software market entering Wednesday’s session. As we wrote earlier this month, the outperformance seemed to reflect the importance of cybersecurity services in a world where digital attacks, fraud and data breaches are a constant threat to governments and businesses alike. That should remain the case no matter what happens next in global trade because Jim believes cybersecurity has basically become a business staple to stay protected. On Wednesday, Bloomberg News reported that Berkshire Hathaway-owned NetJets suffered a data breach. “There’s nothing discretionary about the kind of software that protects you from the things that we’re seeing right now,” Jim said Tuesday night. He noted that’s why we own CrowdStrike and had the conviction to buy in March when the stock was getting hit. “When we think of the geopolitical world we live in today, attacks are only going up. That’s one of the areas where CrowdStrike can shine,” Kurtz told Jim Tuesday. He added that his firm should also benefit from the government’s push for operating more efficiently, despite those aforementioned fears about what Washington’s belt-tightening could mean for software contracts. “For the first time in my career, the government is now acting more like a business,” Kurtz said Kurtz believes this shift sets up a great opportunity for CrowdStrike’s Falcon platform to help the government modernize its security infrastructure while saving money at the same time. Notably, the CEO expressed confidence that net new average recurring revenue will accelerate in the back half of 2025 — a positive sign for investors. “That was important,” Jim said. (Jim Cramer’s Charitable Trust is long CRWD, PANW. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
CrowdStrike Holdings Inc. signage on the floor of the New York Stock Exchange on July 22, 2024.
Michael Nagle | Bloomberg | Getty Images
Cybersecurity stocks remain an indispensable part of an investment portfolio — no matter what’s happening with global trade. That is Jim Cramer’s takeaway after catching up with the CEO of CrowdStrike on Tuesday night.
