Why SentinelOne (S) stock is rising today

What happened:

Shares of cybersecurity company SentinelOne (NYSE:S) rose 6.7% in the afternoon session after the company announced a deal to include its AI-based endpoint security solutions (such as software antivirus) in millions of Lenovo devices. The deal will cover new Lenovo PCs and will also include the option for existing Lenovo customers to upgrade to the SentinelOne security option.

Earlier this month, Lenovo launched new AI PCs powered by AI-enabled processors and embedded with AI features, including custom large language models. Being chosen by Lenovo can be considered a big win for SentinelOne, as it suggests that its cybersecurity offerings fit nicely with the evolving technologies in some of today’s computing devices.

Additionally, market trends are favorable: Lenovo predicts that more than 60% of PCs shipped by 2027 will be AI-enabled, presenting potential new revenue streams for companies like SentinelOne that can provide the right security solutions.

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What the market tells us:

SentinelOne shares are highly volatile and have had 23 moves of more than 5% in the past year. Against that background, today’s move indicates that the market sees this news as significant, but not something that would fundamentally change its perception of the business.

The biggest move I wrote about in the past year was 6 months ago, when the stock fell 16.7% on news that the company reported fourth-quarter results and provided next-year revenue guidance, which was below expectations, suggesting a slowdown. on demand amid a highly competitive landscape with cybersecurity partners like CrowdStrike. In addition, the net income retention rate of 115% missed estimates of 118%. This means that its existing customers have bought fewer products and the company is more dependent on new customers (expensive to acquire) to generate growth. Overall, this was a difficult quarter for SentinelOne.

SentinelOne is down 4% year-to-date and at $24.76 a share trades 17.5% below its 52-week high of $30 from February 2024. Investors who bought 1,000 shares of SentinelOne USD at the IPO in June 2021 would now follow See an investment worth $584.24.

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