Shares in cybersecurity firm Qualys plunged Monday on a Morgan Stanley report that Microsoft will end its marketing pact with the company on May. 1. Earnings for QLYS stock are due Feb. 12.
Qualys sells security vulnerability management services. Its security and regulatory compliance solutions enable customers to identify risks and comply with policies.
"Microsoft recently announced plans to end its partnership with Qualys as the default provider of vulnerability scanning within Microsoft Defender, effective May 1," said Morgan Stanley analyst Hamza Fodderwala in a report. "With Microsoft being one of Qualys' largest customers and partners, we see top-line risks as potentially material."
Fodderwala holds an underweight rating on Qualys stock.
On the stock market today, QLYS stock plunged 10.5% to close at 168.24.
QLYS Stock: Technical Rating
Microsoft's computer security business is booming despite recent hacking attacks on the software and cloud computing giant.
A key part of Microsoft's strategy is offering discounts when bundling security products with premium subscriptions to its Office 365 productivity tools. Most Microsoft security revenue currently comes from email, endpoint and identity security.
Also, Microsoft is becoming a stronger rival to CrowdStrike Holdings, Palo Alto Networks and Zscaler.
In addition, QLYS stock holds a Relative Strength Rating of 91 out of a best possible 99. With Monday's loss, Qualys stock is still up 35% over the past 52 weeks.
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