Morgan Stanley has downgraded cybersecurity firm CrowdStrike Holdings, Inc. (CRWD.US) from "overweight" to "equal-weight," while simultaneously raising its price target from $490 to $495. Analysts led by Keith Weiss indicated they're stepping to the sidelines after the stock's impressive 50% rally and heightened growth expectations, noting current valuations appear full.

Despite the downgrade, analysts emphasized CrowdStrike remains an attractive long-term investment story. However, they believe anticipated second-half acceleration is now fully priced into the stock. The company continues to be viewed as a long-term market leader in cybersecurity, well-positioned to benefit from industry platform consolidation and direct AI-driven tailwinds.

The significant rebound from April lows—nearly 50%—means current valuations already reflect robust growth recovery, leaving little room for near-term upside. According to the analysts, the upcoming Q2 earnings report "likely won't materially alter the investment thesis," as investor focus remains fixed on second-half performance. Visibility into customer commitment programs (CCP) renewals and the impact of Falcon Flex contracts on revenue recognition and margins remains limited.

While maintaining conviction in CrowdStrike's long-term growth potential, the analysts concluded that risk-reward now appears more balanced. They advocate waiting for a better entry point to establish positions, adopting a watchful stance until clearer catalysts emerge.