Jim Cramer calls the announcement of CrowdStrike’s artificial intelligence kill switch a game-changer for cybersecurity. “You should go buy CrowdStrike,” Jim told CNBC after speaking with CrowdStrike CEO George Kurtz in an interview on “Mad Money” that aired Tuesday night. Jim added that this development would be good for the club’s shares, which rose by around 1%. CrowdStrike announced the so-called AI Kill Switch as a new feature of its Falcon Guardian platform during the annual European cybersecurity conference Fal.Con. Launched in September, Falcon Guardian is CrowdStrike’s flagship AI detection and response solution aimed at protecting AI agents that can think, plan, and act for themselves within enterprise computer systems. CrowdStrike and other cyber companies, such as the same club that owns Palo Alto Networks, have warned that the proliferation of AI agents will exponentially increase digital vulnerabilities and require new kinds of security. CrowdStrike said its kill switch tool allows security teams to control AI agents that deviate from their assigned behavior. Essentially, it is designed to give humans more power over artificial intelligence models and systems. Ultimately, Jim believes this tool will become a key growth driver for CrowdStrike and a breakthrough for the industry as a whole. He called the “AI kill switch” the “holy grail” and argued that the ability to shut down rogue AI agents would solve one of the biggest concerns surrounding the technology’s rapid adoption. “Everyone says there is no kill switch,” Jim said, noting that this is the message from big AI companies like Anthropic and OpenAI. “That’s not true anymore. There’s a kill switch. You can shut these things down.” On Saturday, September 12, Anthropic CEO Dario Amodei published an essay calling for a slowdown in the industry’s AI development, citing safety concerns. OpenAI CEO Sam Altman was among those who supported Amodei’s call. On the other side of the debate, companies like Nvidia argued that there was no need for a concerted effort to pace AI adoption because companies need to rigorously test and determine whether their products are safe themselves. Concerns about AI safety reached a fever pitch on Monday, September 14, the first trading day after Amodei’s paper. Cybersecurity stocks soared. CrowdStrike rose nearly 14% on the day. That night, Kurtz tells Jim on “Mad Money” that slowing down the AI model does not eliminate cybersecurity risks. “The genie is out of the bottle,” Kurtz said at the time. “There are already a lot of potentially dangerous models out there, both frontier models and open-class models.” The next night, Nvidia CEO Jensen Huang told Jim, “Safety is an engineering issue. Testing is an engineering issue.” CrowdStrike stock closed at an all-time high of $278 per share on October 6th. Stocks have fallen about 12% since then, following a terrible showing for tech stocks in October and early November. But that didn’t dampen Jim’s enthusiasm for CrowdStrike as a continuing beneficiary of the need to control AI. CRWD Mountain 2024-11-03 CrowdStrike 2 Year Performance CrowdStrike has been a big winner for the club over the past few years, so much so that they sold it late last month after the stock price rose. At the time, portfolio director Jeff Marks wrote: “This decision does not reflect anything negative regarding the fundamentals of the cybersecurity company. Rather, it is a portfolio management move to (re)rightify the position following a significant move towards the top end of the portfolio. This sale will result in a gain of approximately 187% on the shares purchased in the second half of 2024.”The club is rated as a Hold equivalent of 2 on CrowdStrike. The company is rated 4% and has a weight of over 4% in our diversified portfolio. (Jim Cramer’s charitable trusts are Long CRWD, PANW, and NVDA. See here for a complete list of stocks.) As a subscriber to Jim Cramer’s CNBC Investment Club, you will receive trade alerts before Jim makes a trade. After Jim sends a trade alert, he waits 45 minutes before buying or selling stocks in his charitable trust’s portfolio. If Jim talks about a stock on CNBC TV, he will issue a trade alert and then wait 72 hours before executing the trade. The above investment club information is subject to our Terms of Use and Privacy Policy, along with our disclaimer. No fiduciary duties or obligations exist or arise from your receipt of information provided in connection with the Investment Club. No specific results or benefits are guaranteed.
