Stock Market Sell-Off 2026: 2 Growth Stocks Wall Street Says to Buy on the Dip
Photo by Tyler Prahm on Unsplash
- The S&P 500 officially entered correction territory on March 13, 2025, falling 10.1% from its February all-time high — largely driven by Trump tariff fears and stagflation concerns.
- CrowdStrike (CRWD) is down ~22% from its all-time high, yet carries a Wall Street "Strong Buy" consensus with zero Sell ratings and an average price target between $482 and $548.
- Workiva (WK) has shed roughly 31% over three months, but 11 of 14 analysts rate it a Buy, with an average price target of $89.45 implying ~47% upside — and a street-high target of $102.
- Both companies show strong fundamental metrics: CrowdStrike crossed $5 billion in Annual Recurring Revenue (ARR), while Workiva is on track to surpass $1 billion in revenue for the first time in 2026.
What Happened
Markets don't always fall because something broke — sometimes they fall because investors get scared. That's largely what happened in early 2025. President Trump's escalating tariff policies, including threatened 50% tariffs on Canadian imports and sweeping new trade restrictions announced on April 2–3, 2025 (dubbed "Liberation Day"), sent shockwaves through financial markets. The S&P 500 lost 4.84% and the NASDAQ dropped 5.97% in a single session, erasing an estimated $6.6 trillion in market value over just two days — the largest two-day loss in stock market history.
The NASDAQ had already entered correction territory around March 6–7, 2025, roughly a week before the S&P 500 officially crossed that threshold on March 13, 2025, when it had fallen 10.1% from its February 19 all-time high. Growth-oriented technology and software stocks bore the brunt of the selling, as rising inflation fears made investors nervous about owning high-valuation companies whose profits are expected further in the future.
But here's what's worth noting from an investment research perspective: market corrections don't treat all stocks equally. Sometimes fundamentally strong businesses get dragged down simply because the broader mood turned sour — and that disconnect between price and underlying business quality is exactly what many Wall Street analysts are flagging as an opportunity with two specific names: CrowdStrike (CRWD) and Workiva (WK).
What the Data Tells Us
When prices fall during a broad market sell-off, the first question worth asking is: did anything actually change about the business? For CrowdStrike and Workiva, the data tells a surprisingly different story than the stock prices suggest.
CrowdStrike (CRWD) is a cybersecurity company whose flagship Falcon platform protects corporate networks from hackers and data breaches. Think of it like a high-tech immune system for a company's digital infrastructure. Despite its stock sitting roughly 22% below its all-time high, the underlying business is accelerating. CrowdStrike reported full-year FY2026 total revenue of $4.81 billion — a 22% increase year-over-year (meaning compared to the same period one year earlier). More importantly for long-term investors focused on market trends, the company crossed $5 billion in Annual Recurring Revenue (ARR — the predictable, subscription-based income that renews each year) as of January 31, 2026, with ARR growing 24% year-over-year to $5.25 billion. On March 23, 2026, the company confirmed net new ARR of $330.7 million in Q4 alone.
Perhaps the most telling metric for a subscription software business is gross retention rate — essentially, what percentage of customers stick around rather than canceling. CrowdStrike's sits at 97%, meaning nearly every customer who signs up stays. That's the kind of number that makes Wall Street analysts pay attention. The consensus? 33 out of 55 analysts rate CRWD a Buy, zero recommend selling, and price targets range from $482 all the way up to $640 (set by BTIG as the street-high target). This is the kind of stock analysis that separates a price decline from a business decline.
Workiva (WK) operates in a less glamorous but highly defensible corner of enterprise software: financial compliance and reporting. If CrowdStrike is a company's digital immune system, Workiva is its regulatory compliance backbone — helping public companies manage their financial disclosures, audit documentation, and ESG (Environmental, Social, and Governance) reporting in one connected platform. Workiva reported full-year 2025 revenue of $884.57 million, up 19.75% year-over-year, and issued 2026 guidance of $1.036–$1.04 billion — crossing the $1 billion revenue milestone for the first time.
What makes the sector analysis here especially interesting is Workiva's improving profitability. Its non-GAAP (non-Generally Accepted Accounting Principles, meaning adjusted for certain one-time costs) operating margin improved by 1,170 basis points (roughly 11.7 percentage points) year-over-year in Q4 2025, reaching 19.1%. Its net revenue retention rate stands at 113% — meaning existing customers are spending more over time, not less. Contracts over $100,000 grew 22% year-over-year to 2,507 deals, signaling deeper enterprise penetration. Despite a ~31% price decline over three months, 11 of 14 analysts rate Workiva a Buy, with an average price target of $89.45 implying approximately 47% upside, and a street-high target of $102 suggesting up to 68% upside from recent levels.
Key Companies and Supply Chain
Understanding where CrowdStrike and Workiva sit within their respective supply chains is a key part of thorough stock analysis — and it helps explain why Wall Street remains constructive despite the broader market turbulence.
CrowdStrike Holdings (NASDAQ: CRWD) — CrowdStrike occupies the highest-value layer of the cybersecurity supply chain: the platform layer. Rather than selling point solutions (tools that solve one narrow problem), Falcon is an integrated platform that consolidates endpoint protection, threat intelligence, identity security, and cloud workload protection. This matters for market trends because enterprises increasingly want to reduce the number of security vendors they work with — and CrowdStrike is one of the few vendors large enough to absorb that consolidation. With AI-driven threat detection baked into its core product, the company is also well-positioned to benefit from the AI security spending cycle that investment research firms expect to accelerate through 2026 and beyond.
Workiva Inc. (NYSE: WK) — Workiva sits at the intersection of regulatory compliance, financial reporting, and enterprise data management. Its supply chain positioning is unique: as governments globally tighten ESG reporting requirements (particularly in Europe and increasingly in the U.S.), companies of all sizes are being forced to upgrade their compliance infrastructure. Workiva is a direct beneficiary. Its AI-enabled tools for automating audit trails and financial disclosures reduce the manual labor burden on finance teams — a structural tailwind (a favorable long-term trend) that isn't going away regardless of short-term macro volatility.
Broader Sector Context — Both companies operate in sectors — cybersecurity and compliance software — that benefit from non-discretionary enterprise spending. Unlike marketing software or collaboration tools that companies might cut during a slowdown, security and compliance are often legally mandated. This defensive quality within a growth framework is part of what makes the current dip particularly interesting from an investment research standpoint.
What Should You Do? 3 Action Steps
Before looking at a stock's current price or recent decline, it's worth building a clear picture of the underlying business. For both CrowdStrike and Workiva, the publicly available earnings reports, investor presentations, and analyst notes provide a strong foundation. Key metrics worth understanding include ARR growth rate, gross retention rate, operating margin trajectory, and revenue guidance. These are the numbers Wall Street uses when forming price targets — and understanding them helps you evaluate whether the market's current valuation reflects the business reality or short-term fear. Doing your own investment research, even at a basic level, puts you in a stronger position to evaluate what analysts are saying rather than simply following headlines.
The current sell-off has been driven significantly by tariff policy uncertainty and stagflation fears — factors that are largely external to the businesses themselves. Investors watching these stocks are paying close attention to Federal Reserve commentary on interest rates, any developments in U.S. trade policy, and earnings guidance from large enterprise software peers. A reduction in tariff uncertainty or a clearer path on interest rates could serve as a catalyst for growth stocks to re-rate (meaning the market assigns them a higher valuation relative to their earnings). Understanding the macro context around your sector analysis is just as important as understanding the individual company.
Wall Street analyst price targets are useful data points — but they're not guarantees. CrowdStrike's average analyst target ranges from $482 to $548, with BTIG setting a street-high of $640. Workiva's average target of $89.45 implies ~47% upside, with a street-high of $102. These targets are worth researching in context: when were they set, what assumptions do they rely on (revenue growth rate, margin expansion, market share gains), and what risks could cause the business to miss those assumptions? Treating analyst targets as one input in a broader framework — rather than a destination — is a key habit that separates informed observers from reactive ones.
Frequently Asked Questions
Is CrowdStrike (CRWD) a good stock to buy during the 2025 market correction?
CrowdStrike is on the radar of many Wall Street analysts as a potential dip opportunity. The stock is down approximately 22% from its all-time high as of early 2026, yet the business continues to grow — ARR crossed $5.25 billion in January 2026, up 24% year-over-year, and total FY2026 revenue reached $4.81 billion (+22%). With 33 of 55 analysts rating it a Buy and zero recommending a Sell, the professional consensus leans constructive. That said, whether any stock is "good to buy" depends on your personal financial situation, risk tolerance, and time horizon. This analysis is educational — always consult a licensed financial advisor before making investment decisions.
Why is Workiva (WK) stock down 31% and should investors be concerned about the decline?
Workiva's ~31% decline over three months appears to be driven more by the broader macro sell-off affecting growth software stocks than by any deterioration in its business fundamentals. In fact, the company's most recent results showed a 19.75% revenue increase year-over-year and a dramatic improvement in operating margins (+1,170 basis points in Q4). The company also issued 2026 guidance that would take it past $1 billion in revenue for the first time. Of the 14 analysts covering Workiva, 11 rate it a Buy. Whether a stock's price decline reflects an opportunity or a warning sign depends on context — and the data here suggests the business remains on a strong trajectory despite the stock market turbulence.
What caused the stock market sell-off and correction in early 2025?
The primary driver was escalating U.S. trade policy uncertainty under President Trump, including threatened 50% tariffs on Canada and sweeping new tariff announcements on April 2–3, 2025 — an event markets dubbed "Liberation Day." This triggered stagflation fears (the concern that inflation stays high while economic growth slows, a difficult combination for stocks). The NASDAQ entered correction territory around March 6–7, 2025, and the S&P 500 officially crossed the correction threshold (a 10% decline from its peak) on March 13, 2025. The two-day sell-off around Liberation Day erased an estimated $6.6 trillion in market value — the largest two-day loss in stock market history.
How do CrowdStrike and Workiva use AI and why does it matter for their long-term growth?
CrowdStrike's Falcon platform uses AI to detect and respond to cybersecurity threats faster than traditional rule-based systems — an increasingly important capability as attacks become more sophisticated. Workiva has integrated AI into its compliance and financial reporting tools to automate data collection, flag discrepancies, and reduce manual audit work. Both applications represent what analysts describe as "non-discretionary AI" — meaning the AI is embedded in workflows companies must maintain for legal and operational reasons, not just nice-to-have productivity tools. This is one reason both stocks are viewed favorably in long-term sector analysis: their AI features deepen customer dependency rather than simply adding optional features.
What is Annual Recurring Revenue (ARR) and why do analysts focus on it for software stocks?
Annual Recurring Revenue, or ARR, is the total value of subscription contracts a software company expects to collect over the next 12 months. It's one of the most important metrics in software stock analysis because it reflects predictable, repeat income — unlike one-time product sales. When CrowdStrike reports $5.25 billion in ARR growing at 24% year-over-year, it means the company has a high-visibility, growing base of revenue locked in through customer contracts. Investors and analysts watch ARR because it provides a clearer picture of business momentum than quarterly revenue alone, especially for companies still investing heavily in growth. A high gross retention rate (CrowdStrike's is 97%) alongside growing ARR signals that customers are not only staying, but the overall base is expanding — a combination that drives long-term market trends toward higher valuations for these businesses.
Disclaimer: This article is for educational and informational purposes only. It does not constitute financial advice, a recommendation, or an endorsement of any security. Always do your own research and consult a licensed financial advisor before making investment decisions.
No comments:
Post a Comment