Burke Wealth Trims CrowdStrike Position Despite AI Security Outlook

Burke Wealth Management reduced its exposure in CrowdStrike Holdings, Inc. (NASDAQ: CRWD) within its third-quarter 2026 investor letter, preferring other AI equ that it believes offer higher return potential over shorter time frames. The investment firm detailed this portfolio adjustment in its "Focused Growth Strategy" letter, which focused on the cybersecurity provider's changing weight.

CrowdStrike Holdings provides cloud-native cybersecurity software designed to help organizations detect threats, protect data, and secure digital environments. During the first quarter of 2026, the stock declined by 17 percent, a period Burke identified as the peak of the pain for its best-performing enterprise software holding. As of October 23, 2026, CrowdStrike shares closed at approximately $257.51, with a market capitalization of about $266.20 billion. Over the preceding 52 weeks, the stock traded between $85.68 and $286.99, while its one-month return stood at 0.55 percent.

The fund's overall performance in the third quarter of 2026 was strong, with the composite returning 10.8 percent net of fees. This result substantially outperformed the S&P 500 Total Return Index, which gained 2.3 percent over the same period. The year-to-date return for the fund reached 20.0 percent, compared with 12.7 percent for the benchmark. Burke attributed part of this strength to investors reassessing the long-term value of enterprise software platforms that securely connect AI models with proprietary business data.

Burke characterizes these platforms as essential AI "harnesses" that provide permissions, security, and context for enterprise applications. However, the firm cautions that AI agents could challenge traditional software business models and seat-based pricing structures. The fund remains optimistic about the remainder of 2026, citing strong corporate earnings growth and a shift from AI infrastructure spending toward practical applications that may enhance productivity and consumer experiences.

Hedge fund interest in CrowdStrike has increased recently. At the end of the second quarter of 2026, 89 hedge fund portfolios held shares in the company, up from 79 portfolios in the previous quarter. Despite acknowledging the risk and potential of CrowdStrike as an investment, Burke stated that its conviction lies in other AI stocks that it believes hold greater promise for delivering higher returns more quickly.