CrowdStrike stock is flying — but the valuation math is sending warning signs

It's not difficult to understand why CrowdStrike ( CRWD ) stock has experienced a meteoric move. But it is becoming difficult to justify the stock's valuations.

Shares of the cybersecurity darling now trade at 43.54x forward price-to-sales (P/S). Not only is this enormous relative to the broader stock market and other cybersecurity players, but it's higher than CrowdStrike's peak forward sales multiple at its 2021 top (see chart below).

What's more, the stock trades at a forward price-to-earnings (P/E) multiple of 209x as shares have exploded 127% this year, with investors expecting a pickup in business to combat AI agent breaches.

CrowdStrike's earnings are poised to only increase next year by 53%, using even the most optimistic of analysts' estimates compiled by Yahoo Finance .

For a dose of perspective, the forward P/E ratio for the S&P 500 ( ^GSPC )is around 20x.

CrowdStrike also fetches a huge premium here, too, versus rivals in the space.

Okta ( OKTA ) shares trade at 54x estimated forward earnings, Palo Alto Networks ( PANW ) clocks in at 94x, Zscaler ( ZS ) at 44x, and SailPoint ( SAIL ) at 67x.

"At some point, even a great business can become a terrible stock at the wrong price," X user LongGameEquity wrote in a post .

CrowdStrike's big-time move higher comes as the tech industry faces public outcry over the safety of ever-more-powerful AI.

OpenAI ( OPAI.PVT ) CEO Sam Altman kicked off this week by saying people should accept the unintended negative consequences of AI in an interview with Politico.

After weeks of AI warnings from Altman and his rival, Anthropic ( ANTH.PVT ) CEO Dario Amodei, the tech industry banded together in a show of public unity last week.

President Trump and the CEOs of the most powerful AI companies signed a set of voluntary safety standards at a lunch at the White House. This came as calls mount for stricter control of AI following brutal warnings from Amodei and top researchers.

"It's almost like a constitution, in a way," Trump said after the event of the new standards.

Alongside Trump were Tesla ( TSLA ) and SpaceX ( SPCX ) CEO Elon Musk, Meta's ( META ) Mark Zuckerberg, Anthropic's Amodei, Nvidia's ( NVDA ) Jensen Huang, OpenAI's Greg Brockman, and Google's ( GOOG , GOOGL ) Sundar Pichai, among other elite tech names.

The Wall Street Journal reported that several tech execs pulled Amodei aside at the lunch to discuss why he has been so openly alarmist on AI risks.

ZScaler founder and CEO Jay Chaudhry said on Sozzi Unleashed on Tuesday that it's not acceptable for the world to be forced to accept the negative consequences of AI.