Key Takeaways
- Alex Stamos, Facebook’s former security chief, says AI is driving the cost of cyberattacks toward zero while defense stays expensive. He said it after a record $6.3 billion hack at Binance.
- That gap pushes companies to spend more with security vendors like CrowdStrike, Palo Alto Networks and Zscaler, and Dan Ives expects cybersecurity budgets to potentially double in two to three years.
- Analysts already expect CrowdStrike’s revenue to nearly double in the three years to January 2029, and the stock trades at 154x forward earnings, well above its three-year average of 105x.
- The demand case is strong, but at that price CrowdStrike needs analysts’ estimates to keep rising, starting with its Dec. 1 report.
Hackers stole a record $6.3 billion from Binance on Oct. 29, and Binance’s own report shows they never had to break the exchange’s code. A fake recruiter got an engineer to download malware. The attackers later used an internal Binance AI tool to take over two wallet engineers’ machines.
Now bank regulators at the Federal Reserve and the Office of the Comptroller of the Currency are calling banks to ask about weak spots and unusual activity.
On a Nov. 7 episode of Decoder, Alex Stamos explained why attacks like this are about to get much more common. Stamos is Facebook’s former chief security officer and now chief information security officer at AI software company Cognition:
“The cost per token for attackers is going towards zero. And the cost for defenders is staying quite high.”
That’s a scary line for every company with a network, and a very good one for the companies that sell the defense, like CrowdStrike (CRWD), Palo Alto Networks (PANW) and Zscaler (ZS).
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AI just made hacking a volume business
Stamos said “the open weight models have now gotten to the point at which you can automate most of the kill chain.” That’s every step from picking a target to stealing its money or data. He says an AI system can now find the bugs, write the exploits and break into companies in real time, across many targets at once.
He has a blunt fix for companies. Within 90 days, he says, every company will have to run the attack on itself, either with an AI red-teaming product or with a firm it hires. “If you do not, you will get breached.”
That’s a new line in the budget, on top of everything companies already spend on security. On a Nov. 3 episode of the RiskReversal Pod, tech analyst Dan Ives said budgets are “going to potentially double in cybersecurity for IT over the next two, three years.” He also said who he thinks gets the money: hacks increase “the opportunity and the demand for the CrowdStrikes, for the Palo Altos, for the Zscalers.”
Wall Street is already counting on it
Analysts already expect a lot of that spending to reach CrowdStrike. Revenue was $4.81 billion in the year ended January 2026. The consensus has $9.03 billion for the year ending January 2029, nearly double in three years:
So Ives’ doubling is roughly what analysts already model for CrowdStrike. They haven’t raised it much, either. They’ve lifted their revenue estimate for the year to January 2028 by just 1.9% since June 30, even after net new annual recurring revenue jumped 51% in the quarter to July 31.
Palo Alto’s estimates are climbing too, from $11.5 billion of revenue in the fiscal year ended July 2026 to $18.5 billion expected in fiscal 2029:
And for the quarter to Oct. 31, Palo Alto guided its next-generation security annual recurring revenue up 63%, to $9.54-$9.56 billion.
Cheaper defense could shrink the bill
Stamos’ own answer to the cost gap is cheaper defense: “it is very important for us to find ways for defenders to have cheaper options.” He added that very few people are working on it. That’s a risk for the vendors. If defense gets cheaper, each customer’s bill could shrink.
CrowdStrike is already selling on price. CEO George Kurtz has said its AI model costs about three cents a task, against about $10 on a frontier model. My read: cheap defense favors the biggest platforms, since they can spread the cost of building their models across the most customers.
The stocks are jumpy, though. CrowdStrike sank 9% and Palo Alto 8% on Nov. 5 as the AI trade unwound, and both won back 2% the next day.
At 154x, CrowdStrike needs more than the estimates
As of Nov. 6, CrowdStrike traded at 154x forward earnings. That’s far above its three-year average of 105x, though below the nearly 198x it hit on Oct. 6:
The way I see it, Stamos just made the best case I’ve heard for security budgets to keep climbing, and CrowdStrike is the company I’d want selling into them. But at this multiple, the stock is already betting that analysts’ estimates are too low, so it needs those raises to show up soon.
Palo Alto reports on Nov. 18, CrowdStrike on Dec. 1 and Zscaler on Dec. 2. That’s three reads on whether hacks like Binance’s are turning into bigger budgets. Of course, if defenders find the cheaper options Stamos is pushing for, some of that money could end up with tools that don’t exist yet.
So what is CrowdStrike stock actually worth?
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Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
