Why CrowdStrike Stock Is Sinking Today

CrowdStrike (NASDAQ: CRWD) stock is losing ground in a day of pullbacks for tech-sector valuations. The cybersecurity specialist's share price was down 2.7% as of 3:45 p.m. ET amid a 0.6% decline for the Nasdaq Composite index. The stock had been off as much as 6% earlier in the daily session.

Investors are selling out of growth-dependent tech stocks ahead of Nvidia's fourth-quarter (Q4) report on Wednesday, and CrowdStrike is moving lower in conjunction with the market action. The stock is also falling in response to an analyst downgrade.

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CrowdStrike stock slips as investors await Nvidia's Q4 report

Due to the company's importance in the artificial intelligence (AI) space, Nvidia's quarterly reports have become the most highly anticipated and influential releases when earnings season rolls around. The AI hardware leader's Q4 release is now just a couple of days away, and investors are reorienting their portfolios to brace for potential volatility if the results fail to wow Wall Street.

The average analyst estimate is calling for the business to post revenue of approximately $38 billion and net income of roughly $21.2 billion. Performance for the period and forward guidance are poised to have a significant impact on overall valuation sentiment surrounding the tech sector. For better or worse, CrowdStrike and other growth stocks could make big moves following the report.

What's next for CrowdStrike?

In addition to Nvidia-related market shifts, CrowdStrike is also pulling back in conjunction with new analyst coverage today. Arete published a new note on the company, downgrading the stock from neutral to buy and assigning a one-year price target of $456 per share on the stock. While that still implies potential upside of roughly 15% as of this writing, the downgrade from Arete signals that the firm's analysts believe the stock's risk-reward profile has shifted in less favorable directions. Investors will get a closer look at CrowdStrike's business performance and outlook when the company publishes its Q4 results after the market closes on March 4.

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Keith Noonan has positions in CrowdStrike. The Motley Fool has positions in and recommends CrowdStrike and Nvidia. The Motley Fool has a disclosure policy.