It was somewhat unexpected to see the sheer range of companies that got hit with the fallout from the recent CrowdStrike (CRWD) hack. But one of the hits was to none other than tech giant Microsoft (MSFT). The ultimate result of that hacking left some analysts concerned, but investors took it in stride, sending shares up fractionally in Monday afternoon’s trading. The big problem, according to Citi analyst Tyler Radke, is that the CrowdStrike hack left people wondering about security on Microsoft devices in general.
While this was a problem somewhat removed—the issue was CrowdStrike, not Microsoft—the point remained that Microsoft was impacted.
Throw in potential Windows vulnerabilities, as well as public hearings and troubles with the Federal Trade Commission, and that could act as a drag on Microsoft stock going forward. Radke further clarified that the damage from the CrowdStrike fallout would be limited but “…may raise more perceived vulnerability concerns.”
The Growing Blue Screen Concern
The Blue Screen of Death is a notorious problem for Microsoft. It is to PCs and similar devices what the Red Ring of Death was to the Xbox 360 – a sign that something has gone very wrong and needs addressing. And when they show up, it’s a blow to Microsoft’s entire image as a major provider of a highly-reliable operating system.
The impact of CrowdStrike’s outage on Microsoft systems was comparatively minor. Reports suggest that 8.5 million devices were hit. Objectively, that’s a lot, but when you realize that’s not even 1% of Microsoft’s total install base, it’s really little more than a concern. Minor, but valid regardless; Microsoft will likely have some work to do to improve its slightly tarnished image.
Is Microsoft a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Strong Buy consensus rating on MSFT stock based on 34 Buys and one Hold assigned in the past three months, as indicated by the graphic below. After a 28.72% rally in its share price over the past year, the average MSFT price target of $504.12 per share implies 13.97% upside potential.
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