AI’s latest scare created an unexpected winner
The same warnings that rattled chipmakers this week have sent cybersecurity stocks in the opposite direction.
CrowdStrike (NASDAQ: CRWD) is up roughly 14% since Monday, while Okta (NASDAQ: OKTA) has gained 10% and Palo Alto Networks (NASDAQ: PANW) is up 8%. The First Trust Nasdaq Cybersecurity ETF has added about 5%.
The rally followed unusually blunt warnings from leaders at Anthropic and OpenAI about the risks created by increasingly powerful AI models. Much of the market initially focused on whether those concerns could slow AI development and cool demand for chips and data centers.
Cybersecurity offers another way to look at the same problem. More capable AI does not only make legitimate businesses more productive. It also makes attackers faster, cheaper and more scalable.
Okta CEO Todd McKinnon put it plainly: threat actors are using the same models, and they are not waiting for the safety debate to be resolved.
AI creates more identities, more access and more attack surfaces
The opportunity goes beyond defending against AI-generated phishing emails.
Businesses are beginning to give AI systems access to internal data, software, customer records and corporate workflows. As AI agents become capable of taking actions rather than simply answering questions, companies have to determine which systems they can access, what information they can see and who is responsible when something goes wrong.
That plays directly into existing cybersecurity categories such as identity management, endpoint security, cloud protection and threat detection.
Okta’s comments are particularly interesting because identity could become one of the most important layers of enterprise AI. Companies already struggle to manage access for employees, contractors and software applications. Adding thousands of autonomous AI agents creates another class of digital identity that needs permissions, monitoring and controls.
The cyber trade still needs to prove itself
A strong week in cybersecurity stocks does not automatically mean revenue growth is about to accelerate.
The more important evidence will come from customer spending. CrowdStrike, Palo Alto and Okta will need to show that AI-related security concerns are expanding contracts, bringing in new customers or increasing demand for their platforms.
The long-term setup is compelling because cybersecurity does not compete with AI spending. It grows alongside it. Every new model, agent and automated workflow gives businesses another piece of infrastructure that has to be protected.
The first stage of the AI trade rewarded the companies supplying compute. Security may become one of the industries that benefits from everything built on top of that compute.
This week’s rally could fade. The underlying problem probably will not.
As AI becomes more capable, protecting who and what gets access to it becomes increasingly valuable.
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