In the premarket trading session today, CrowdStrike (CRWD) shares are falling over 4%, building on the significant declines seen on Friday. The drop comes after an update to the cybersecurity firm's software caused a widespread outage in Microsoft's (MSFT) cloud services, disrupting businesses globally. On the other hand, shares of CrowdStrike's competitors, Palo Alto Networks (PANW) and SentinelOne (S), are continuing to gain momentum.

The outage caused by CrowdStrike's software update has led to concerns among investors, leading to a decline in their share value. Deutsche Bank analysts have warned that CrowdStrike's rivals will likely try to capitalize on this situation. Competitors such as SentinelOne, Microsoft, and Palo Alto Networks, who saw their shares rise following the outage, are expected to seize the opportunity to gain market share.

According to Deutsche Bank analysts, CrowdStrike's shares face a notable downside risk, particularly considering that the company is regarded as a premium entity trading at 15 times 2025 revenue. The sentiment is that the competitors will utilize CrowdStrike's misfortune to their advantage.

Short sellers of CrowdStrike stock made a significant profit of over $373 million on Friday, according to research firm S3 Partners. Despite the recent decline, CrowdStrike shares have enjoyed an overall increase of almost 20% this year until the close of trading on Friday.

CrowdStrike, known for its security software, provides solutions to various customers, and partners with major cloud platforms such as Google Cloud, offered by Alphabet (GOOGL) and Amazon Web Services (AWS), provided by Amazon (AMZN), in addition to Microsoft Azure. The incident highlights the critical role of cybersecurity companies like CrowdStrike in safeguarding cloud services and protecting businesses from potential disruptions.

As the fallout from the software update continues, market participants will closely monitor the developments and the extent of the impact on CrowdStrike's market position and reputation in the cybersecurity sector.

Disclaimer: The information presented in this article is based on the provided context and does not reflect real-time market conditions.