Delta Seeks Damages from CrowdStrike and Microsoft After Massive Outage – Shares Tumble 5%!

Detroit, Michigan – Delta Airlines is seeking damages from cybersecurity firm CrowdStrike and tech giant Microsoft after a major outage led to thousands of flight cancellations earlier this month. The outage, caused by a software update from CrowdStrike, cost Delta an estimated $350 million to $500 million. As a result, Delta has enlisted attorney David Boies to pursue compensation from both companies. Shares of CrowdStrike plummeted by 5% following news of Delta’s legal action, while Microsoft’s shares saw a slight decrease.

The repercussions of the outage have been significant, with CrowdStrike’s shares dropping more than 32% in July alone. The impact of the outage highlights the vulnerabilities that companies face in today’s technology-driven world. It serves as a reminder of the importance of robust cybersecurity measures to prevent such disruptions from occurring in the future.

In another sector, UBS predicts that the tech industry may experience a period of support following recent market volatility. Despite investors shifting away from tech stocks in favor of other assets, the sector could present an attractive entry point for investors in the coming weeks. UBS highlights the historical trend of tech corrections followed by rebounds, suggesting that the recent pullback could offer a favorable opportunity for those looking to invest in tech companies with strong growth prospects.

On the housing front, S3 Partners notes that homebuilding stocks are becoming increasingly “squeezable” as consumer demand for housing rises. The sector has seen a surge in buying momentum, prompting short covering and stock price increases. With short positions in homebuilding stocks experiencing losses, the overall trend suggests a positive outlook for the industry moving forward. The SPDR S&P Homebuilders ETF has seen substantial gains both in July and over the course of 2024.

Overall, the market climate is characterized by shifting dynamics, with investors reacting differently to earnings reports this season. Companies that fall short of earnings expectations are facing harsher punishments, while those that exceed projections are not being rewarded as generously as in previous quarters. This trend underscores the need for companies to deliver strong financial results to maintain investor confidence and support stock performance in a competitive market environment.