When it comes to wealth generation, there are few indexes in the world that have a better track record than the S&P 500. In this index, there are a lot of companies that have generated life-changing returns for investors over the long run.
Here, I’m going to highlight an S&P 500 stock that has returned a whopping 59% per year, on average, over the last three years. Could this company be worth considering for an ISA or SIPP portfolio today?
A cybersecurity powerhouse
The company in question is CrowdStrike (NASDAQ: CRWD). It’s a global leader in the cybersecurity space.
Today, it protects 300 of the Fortune 500 companies and 543 of the Fortune 1,000 businesses. Note that eight out of the top 10 financial services firms use it for cybersecurity protection while eight out of the top 10 tech companies also employ its solutions.
I first bought this stock for my portfolio back in October 2024 when it was trading near $300. And it has done well for me, rising nearly 50%.
I just wish I’d bought it a little earlier. Had I pulled the trigger three years ago (it was on my watchlist at the time), I would have quadrupled my money!
Huge potential over the next decade
While I’m up almost 50% on my position, I remain very bullish on CrowdStrike. There are a few reasons why.
One is that the cybersecurity industry looks set for prolific growth over the next five to 10 years. According to experts, the industry could be worth $500bn-$700bn by 2035, up from around $200bn in 2024. The emergence of AI – and the subsequent increase in the number and sophistication of threats – is expected to be a key growth driver. Looking further out, analysts see the industry being worth $1trn at some point (some analysts believe it could be bigger than AI itself) so this company is likely to enjoy a very favourable backdrop.
Another reason I’m bullish is that CrowdStrike is generally considered to have a best-in-class cybersecurity offering. One thing that stands out about this company is that it offers network immunity. So, for example, if a new threat is detected at a company in the UK, every other CrowdStrike customer globally is protected from that same threat within seconds. This provides a ‘network effect’ – the more customers it signs, the more powerful its offering.
I also like the fact that CrowdStrike is led by CEO George Kurtz. He founded the company back in 2011 with the goal of reinventing cybersecurity for the cloud era. Research has shown that founder-led companies are often good long-term investments. One reason they often do well is that founders tend to have ‘skin in the game’ (note that Kurtz owns over 2% of CrowdStrike shares).
Worth a look today
Now, while I’m bullish on the stock, there’s no guarantee that it will do well, of course. Cybersecurity is a dynamic industry – where threats are always evolving – and CrowdStrike could make a misstep at some point.
The valuation is also a risk. Like many other high-growth tech stocks, it has a lofty valuation today.
Taking a long-term view, however, I’m very optimistic about this stock’s prospects. I believe it’s worth considering for an investment portfolio while it’s 20% below its highs.
