In finance, Jim Cramer is a name that always stirs up opinions – good and bad. As the host of CNBC's “Mad Money,” he’s known for his high-energy stock recommendations. Less than two months ago, however, Cramer was very optimistic about CrowdStrike Holdings Inc. (NASDAQ:CRWD), a leading cybersecurity company. But, recent events have shown just how unpredictable the stock market can be, even for experts.
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Back on May 29, 2024, Cramer was all praises for CrowdStrike. He pointed out that the company had consistently performed well since it went public, never missing an earnings quarter. He highlighted the strong leadership of CEO George Kurtz and was confident that CrowdStrike would keep doing well despite challenges in the enterprise software sector. "I don't think that Domino is going to fall," he confidently stated, making it clear he believed in the company's bright future.
However, things went south when CrowdStrike created a global IT outage because of a faulty software update. This disruption affected millions of Microsoft computers and countless businesses. It also caused CrowdStrike's stock to drop by 11% initially and up to 24% later. Although CEO George Kurtz quickly took responsibility and explained that the problem was an internal issue, not a security breach, all the affected computers had to be fixed manually.
CrowdStrike is actively working with customers impacted by a defect found in a single content update for Windows hosts. Mac and Linux hosts are not impacted. This is not a security incident or cyberattack. The issue has been identified, isolated and a fix has been deployed. We...
— George Kurtz (@George_Kurtz) July 19, 2024
Despite the incident, Jim Cramer stayed upbeat about CrowdStrike's future. On CNBC's "Squawk On The Street," he praised CEO George Kurtz for quickly addressing the issue and apologizing. He also attributed the stock’s drop to “bad luck,” mentioning an unrelated Microsoft Azure outage that worsened things. He reassured viewers that the problem was just a sloppy update, not a flaw in CrowdStrike's core technology, and predicted a quick recovery for the company as confidence in its capabilities returned, saying, "The fact is that it was just an update, it was not a hack. And I think when things settle down, people will return to George. We'll forget about it three months from now."
Past Missteps
Cramer’s unwavering support for CrowdStrike is no surprise to those familiar with his mixed track record. He has often been criticized for some of his wrong predictions:
Hewlett Packard Enterprise (HPE): In 2012, Cramer told his audience to sell HPE stock because he believed the company had a “broken corporate culture.” Contrary to his advice, HPE's stock jumped by 110% in six months.
Netflix (NFLX): On Nov. 2, 2012, Cramer recommended selling Netflix. Instead of dropping, the stock soared 174.49% in six months, proving his call wrong.
Best Buy (BBY): On Nov. 20, 2012, Cramer suggested selling Best Buy. Despite his advice, the stock rose by 124.64% within the next six months.
Kohl's Corp (KSS): On April 7, 2015, Cramer gave a Buy rating for Kohl's, but the shares fell by 41.11% over the next six months.
Qorvo (QRVO): Similarly, on April 7, 2015, he recommended buying Qorvo, but the stock dropped 37.8% in six months.
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This article To No One's Surprise, Jim Cramer Praised CrowdStrike Less Than Two Months Ago 'I Don't Think That Domino Is Going To Fall' originally appeared on Benzinga.com
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