Will CrowdStrike's FedRAMP Authorization Move CRWD Stock?

Key Points

• CrowdStrike announced that its Falcon platform achieved FedRAMP High Authorization
• This will allow CrowdStrike to compete for business with some of the U.S. government’s most sensitive projects.
• However, the company is one of many to receive the authorization at a time when some investors may feel the stock is fairly valued.

On March 19, CrowdStrike Holdings Inc. NASDAQ: CRWD announced that its Falcon platform achieved the Federal Risk and Authorization Management Program (FedRAMP) High Authorization, the program’s most rigorous security compliance standard.

Obtaining this authorization will make the Falcon platform eligible for U.S. federal agencies, public sector organizations, the Defense Industrial Base (DIB) and critical infrastructure entities that handle highly sensitive information.

It’s an important milestone for CrowdStrike’s future growth potential, but it’s only one data point for investors to consider.

That could explain why the market reaction has been lukewarm. Investors seem to realize this isn’t an exclusive contract, and potential revenue isn’t the same as booked revenue.

Why Is FedRAMP Important?

The FedRAMP Authorization Act was part of the 2023 National Defense Authorization Act (NDAA). The NDAA categorized the FedRAMP program “as the authoritative standardized approach to security assessment and authorization for cloud computing products and services that process unclassified federal information.”

The program’s significance lies in the growing threat from nation-states and a hacker network that is becoming more sophisticated, particularly with the emergence of artificial intelligence (AI). FedRAMP provides U.S. agencies with real-time, AI-driven security to meet that threat.

"The Falcon platform simplifies security by unifying endpoint, identity, data and cloud workload protection into a single, AI-powered platform...,” remarked CrowdStrike president Michael Sentonas, “...With FedRAMP High authorization, agencies can deploy the Falcon platform to fortify the nation’s most critical systems against relentless cyber threats."

At a time when government efficiency is making headlines, investors should note that the FedRAMP program establishes a public-private partnership that will reduce duplicative efforts, inconsistencies, and cost inefficiencies.

CrowdStrike Is One of Many to Receive FedRAMP Authorization

As you would imagine, other cybersecurity companies also pursued and received FedRAMP authorization, which explains why CrowdStrike isn’t the only company to achieve this designation.

It’s also notable that members of the U.S. Congress have been buying CRWD stock in recent months. That suggests that Congressional insiders believe that the FedRAMP authorization will be significant for the company’s top line, which hit a record of $1.06 billion in its fiscal year 2025 fourth quarter.

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There’s More Than One Catalyst Moving Cybersecurity Stocks

Around the same time as the FedRAMP authorization announcement, the broader cybersecurity industry got a lift from Alphabet Inc.’s NASDAQ: GOOGL $32 billion acquisition of Wiz, an up-and-comer in the sector.

The acquisition is sure to draw scrutiny from regulators. However, Alphabet is optimistic that the transaction, which it expects to be completed by 2026, will get approved as government agencies understand the threat posed by AI.

Since the announcement, institutional investors have been buying cybersecurity stocks, and CrowdStrike has been one of those benefiting.

Investors May Be Asking the Wrong Question

The FedRAMP authorization is particularly noteworthy for CrowdStrike. The company is still recovering from the update glitch that caused widespread problems with Microsoft Windows computers running the software in July 2024. CRWD stock dropped 41% in just two weeks.

It's recovered all those losses since that point. And the company continues to beat revenue estimates both sequentially and year-over-year (YoY). The company’s Falcon platform finished the 2025 fiscal year with a total addressable market (TAM) of $116 billion and CrowdStrike projects that will reach $250 billion by its 2029 fiscal year. However, with the stock still down nearly 20% from its all-time high, investors are wondering why the cybersecurity sector isn’t getting more attention from investors.

Some of that may be the general shift out of technology stocks. A more specific reason may be found in the company’s operating margin, which is around 1.37% as of March 2025. That’s a notable improvement from the negative margins the company posted earlier in the 2025 fiscal year. However, the average operating margins in cybersecurity are around 15% to 20%. And it’s not unusual for the top companies to generate an operating margin that exceeds 25%.

That means the right question may be whether the stock is fairly valued. The CrowdStrike analyst forecast on MarketBeat gives the stock a $399 price target, which gives investors an 8% upside. Bank of America NYSE: BAC recently raised its price target for CRWD stock to $450, which suggests the stock could make another run at its all-time high.