☕️ Should you buy CrowdStrike now?
Jun 05, 2025Howdy 👋
The markets continue to be listless this morning.
There was an early bid – meaning buying – on news that US President Donald Trump and Chinese President Xi Jinping have spoken… during a call initiated by Trump according to Beijing’s Ministry of Foreign Affairs which dutifully pointed that out.
Not to get off track, but this is a subtlety most folks will miss.
The West views it as a sign of strength that our leaders initiate this kind of diplomatic dance because it’s viewed as bold or proactive. China views it as a sign that they didn’t, because doing so means losing “face” or being seen as needing something.
Here’s what you want to think about if you’re serious about your money.
The markets will roar higher when there’s a deal or even just a few “agreed” to talking points.
As is almost always the case in situations like this one, the time to make your move is now.
Why?
Simple.
Money watches who knocks, not just who answers.
Here’s my playbook.
1 - I’d rather invest in optimism any day than cower in fear
I sat down for a wide-ranging discussion with my friend and colleague, the super-savvy Scott Shellady earlier this week. So many people have missed the ongoing rally off April lows when they shouldn’t have.
We talked about why and how investors can reframe their thinking around what’s likely to “go right”… instead of cowering in fear or worse staying on the sidelines because of they’re scared of what might happen. (Watch)
Keith’s Investing Tip: The difference between probabilities and possibilities is very subtle… and critically important to investors in search of bigger, better and more consistent profit potential.
2 – NATO’s surge – who’s paying up
The U.S. just declared that NATO’s new 5% defense spending target “will happen.” (Read) That’s up from the current 2% requirement — and most countries haven’t even hit that.
US President Donald Trump and NATO Secretary General Mark Rutte are pushing hard: 3.5% for military muscle, 1.5% for cybersecurity and infrastructure.
Germany, the U.K., and Poland are on board. Canada, Spain, and Italy? Not surprisingly, still dragging their heels.
MyPOV: The world’s getting more dangerous, not less. And that means defense budgets are going vertical… or at least going to climb very consistently and far more sharply than most expect.
So is it time to pile into defense stocks?
Not blindly.
The real edge – and profit potential - is in knowing where the money actually goes:
➤ Command & control systems
➤ Cybersecurity infrastructure
➤ Logistics and replenishment tech
➤ Defense primes with deep contracts
Keith’s Investing Tip: Your job as an investor isn’t to pick sides when it comes to geopolitics. It’s to follow the capital and – when you can – get ahead of it. I say that because the world’s most successful investors don’t bet on politics — they bet on stability, productivity, and profits. Which is why I suggest you do the same thing.
Hopefully you’ve got a “buy list” at the ready like I do.
One of my favorite defense stocks, btw, has handily beaten the S&P 500 over the past 1, 3 and 5 year periods while the other has fallen behind… for now. Even so, I don’t plan on selling it any time soon given what I think I know about where it’s going and the profit potential associated with that.
Besides, I love the dividend… so there is that. 😀
3 – Should you buy CrowdStrike?
Okay sports fans, let’s get serious.
The company reported revenue of $1.10 billion and EPS of $0.73.
That’s a 20% increase in revenue YoY at a time when recurring annual revenue jumped to $4.44B, which is itself a 22% increase. EPS is still positive but down -7.6% YoY to “only” $0.73.
And “investors are disappointed”???!!!
Totally predictable.
What’s really happened is that the sharks just separated the minnows from their money by creating a narrative that scared ‘em out. Then, to ensure the message really sunk in, they pushed prices down to clear out the stops and pocket the change.
Sooooooo…. should you buy CrowdStrike now?
Wrong question.
Flip that around.
What you want to be asking yourself this morning is why wouldn’t you buy it.
- Cybersecurity is a $4-6 trillion dollar problem that is getting worse every day
- There’s an attack every 39 seconds globally according to various sources but I expect that to drop by half within the next 12 months
- Everything with a chip in it from your refrigerator to your car, your phone and your retirement account is at risk
You know what to do and how and – if not – where to find me.
4 – Read this if you’re a biotech investor
A new report from Harvard’s Belfer Center points to biotech as the next domain where China could leap ahead of the U.S.
Backed by aggressive state planning, faster regulatory pipelines, and a deep bench of talent, China is rapidly advancing in drug development, pharma manufacturing, and agricultural biotechnology. (Read)
Uh, yeah.
That’s not the real news, though.
Layoffs and shuttered labs in U.S. biotech hubs like Boston and Cambridge are flashing warning signs. Some of the most notable shutdowns include Biogen, iTeos Therapeutics, Tango Therapeutics, Boundless Bio, Allergan Aesthetics (AbbVie).
Let’s talk about why this is really happening.
First, US regulations are too restrictive which means that many US medical trials, development efforts and new treatments are stopped before they even get out of the gate. And human testing… forget about it!
Second, many US biotech facilities, think tanks and other labs that are supposedly on the cutting edge are – and I’ll just rip the Band-Aid off here – heavily funded by Chinese money not because they want the medicine, but because they want the tech and the IP.
You didn’t really think like so many PhDs and academic boards who turned a blind eye that this was about health or the purity of science… did ya??!! 🤦️
And third, China is simply pulling up their tent stakes having borrowed enough “open access” material, knowledge and digital IP that they’re confident they can take it from here.
What now?
A bipartisan U.S. commission just called for $15 billion in emergency funding to keep pace—warning that a “ChatGPT moment” in biotech is coming fast.
I agree but that’s not the half of it.
If the US really does want to maintain a lead, the medical, academic and regulatory communities need to stop tearing each other’s throats out and work together. And insurance companies need a good kick in the asteroids to get outta the way. Legislators, too.
While we’re on the subject.
Read Palantir CEO Alex Karp’s book, The Technological Republic, which is an unapologetic, forceful look at the culture of complacency, timid leadership and intellectual fragility have made the U.S. vulnerable in an era of mounting global threats… exactly the stuff I am talking about here.
And please read it no matter how you feel about Palantir, about politics and about tech. You don’t need to agree or disagree with what he’s written… but you do need to understand the perspective as an investor.
If China gets there first, the risks are very real that the West may never catch up.
MyPOV: We’re standing at the edge of a revolution in customizable medicine—targeted therapies, AI-accelerated discovery, gene-editing breakthroughs—and it’s going to create a new generation of millionaires.
5 - Big bet, little brain: Why I’m still avoiding Amazon
Amazon is launching agentic AI - software that can reason and think on your behalf - and backing that with a $10B data center investment in NC.
Many investors think this is sign of how progressive the firm is but to me it's another sign of just how much catching up it’s got to do.
I'll continue to avoid Amazon because I believe there are much stronger players in the game.
Not for nothing, my newly improved Alexa is still dumber than a bag of rocks.
Siri, btw, is laughing as I type.
But I digress.
On a related note, I think it might be worth a look at MongoDB which just reported confidence in its cloud-based database services. (Read)
Scores of companies around the world are going to “re-platform” legacy applications and create entirely new net-based workloads.
Hmmm.
Bottom Line
Pessimists have a hard time making money.
Be an optimist.
Life is a lot more pleasant, and profits become a lot more consistent.
As always, let’s MAKE it a great day.
You got this – I promise!
Keith 😀
PS: I’m often asked if I do a podcast and the answer is sorta… that’s why we’ve recently starting making every Five with Fitz available in video format on my YouTube channel.
