09:09 AM EDT, 07/19/2024 (MT Newswires) -- CrowdStrike Holdings' ( CRWD ) global outage after a content update to Microsoft ( MSFT ) Windows hosts is a "major blow" to CrowdStrike's ( CRWD ) reputation and would most likely weigh on investor sentiment and business activity for several quarters ahead, Oppenheimer said in a note Friday.

The investment bank said it expects delayed purchases, some customer attrition and slower upsell following the outage, prompting a revision in its near/mid-term outlook for CrowdStrike ( CRWD ) to negative although its long-term view remains unchanged.

CrowdStrike ( CRWD ) said the issue was not a security breach or a cyberattack, but Oppenheimer said the incident was a software and process update failure that caused "significant operational and financial damage to the company's customers globally." Systems were being restored as of Friday morning.

"We expect the company... to review its internal processes transparently to raise customer and investor confidence," Oppenheimer analysts said in the note. "This process takes time."

Oppenheimer said CrowdStrike ( CRWD ) shares are expected to be volatile in the weeks ahead, but maintained its outperform rating on the stock until the magnitude of the potential financial implications of the incident is determined.

Shares of CrowdStrike ( CRWD ) were down more than 12% in recent premarket activity Friday.

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