Delta Air Lines (DAL) is seeking financial and punitive damages from CrowdStrike (CRWD) in a lawsuit accusing the latter of gross negligence in the global IT outage caused in July 2024. The air carrier is alleging that CrowdStrike sent a faulty update without pre-testing to millions of Microsoft (MSFT) computers, causing a crash and days of crippled operations. Delta has said the IT crash cost it over $380 million in lost revenue and $170 million in additional expenses.
Delta-CrowdStrike Dispute Continues
Delta filed the lawsuit on Friday, October 25, in a Georgia state court. The lawsuit claims CrowdStrike “cut corners, took shortcuts, and circumvented the very testing and certification processes it advertised, for its own benefit and profit.” Moreover, Delta claims that the update reached its Microsoft Windows-enabled computers even though it had switched off auto updates. The carrier is claiming over $500 million in expenses, unaccountable lost profits, legal fees, reputational harm, and future revenue loss in the lawsuit.
In response, a CrowdStrike spokesperson said that Delta’s allegations are faulty and baseless and that the airline operator lacks an understanding of how modern cybersecurity systems function. The spokesperson even claimed that the lawsuit reflects a “desperate attempt to shift blame” and cited Delta’s slower recovery owing to its outdated IT infrastructure. In contrast, Delta says it has spent billions of dollars in building robust and updated technology solutions, one of the best in the airline industry.
The outage had caused air carriers nationwide to ground thousands of flights and cancel several while also affecting banks, hotels, and healthcare companies. Delta also canceled over 7,000 flights, affecting 1.3 million passengers in the following five days. Both CrowdStrike and Microsoft have blamed Delta’s outdated IT infrastructure for the aggravated issues at the carrier. The two have even said that Delta did not respond to their initial SOS response feeds and undertook damage control of its own accord.
Is DAL Stock a Buy or Sell?
Despite the ongoing issues, analysts remain highly optimistic about Delta stock. On TipRanks, DAL stock has a Strong Buy consensus rating based on 16 unanimous Buy ratings. Also, the average Delta Air Lines price target of $63.15 implies 16.7% upside potential from current levels. Year-to-date, DAL shares have gained nearly 36%.
Is CRWD a Good Stock to Buy?
Wall Street remains highly optimistic about CrowdStrike stock’s trajectory. CRWD stock has a Strong Buy consensus rating based on 34 Buys and six Hold ratings. The average CrowdStrike Holdings price target of $324.80 implies 8% upside potential from current levels. Meanwhile, CRWD shares have gained 17.7%.
