CrowdStrike Drop Weighs Down Cybersecurity ETFs

A sharp drop in shares of CrowdStrike Holdings Inc. (CRWD) weighed on cybersecurity ETFs Wednesday, even as the broader stock market pushed higher.

CrowdStrike fell as much as 8.9% after reporting first-quarter revenue that came in just shy of analyst expectations. The company posted $1.1 billion in revenue, slightly below estimates, and while that still represented nearly 20% year-over-year growth, it underwhelmed investors who had pushed the stock to record highs on Tuesday.

With a market cap of $115 billion, CrowdStrike is one of the largest pure-play cybersecurity firms in the world, second only to Palo Alto Networks (PANW), which is worth around $130 billion. The stock had been up 43% year-to-date heading into the report; it’s now up 35%.

Strong Cybersecurity Demand 

CrowdStrike has benefited from the growing need for cybersecurity in an increasingly digital and threat-filled world. The company is a leader in cloud-based security and has been quick to adopt newer technologies like artificial intelligence to stay ahead of evolving threats. 

Shares were hit hard last year after a faulty update to its software caused widespread outages across banks, airlines and other critical systems, triggering a global tech disruption. 

The incident raised concerns that CrowdStrike’s reputation could take a permanent hit, but the company moved quickly to contain the fallout and the stock rebounded strongly in the months that followed, eventually climbing to new highs—until today’s pullback.

CIBR, HACK & BUG Impacted

CrowdStrike has been a big driver of returns for cybersecurity ETFs in 2025. The three largest—the $9.5 billion First Trust NASDAQ Cybersecurity ETF (CIBR), the $2.2 billion Amplify Cybersecurity ETF (HACK) and the $1.1 billion Global X Cybersecurity ETF (BUG)—are up between 11% and 16% year to date. All three count CrowdStrike as their second-largest holding, with weightings between 6% and 10%.

While the company’s fundamentals remain strong, Wednesday’s drop is a reminder of the volatility that can come with single-stock bets.

For investors who want exposure to the broader cybersecurity theme without taking on that kind of idiosyncratic risk, ETFs offer a more diversified approach. As of midday Wednesday, CrowdStrike shares were down more than 5%, but the ETFs that hold it were only fractionally lower.