Just a panic? Why Wall Street doesn't believe in cybersecurity collapse due to AI

Analysts from Wall Street believe that the sell-off in shares of companies in the field of digital security is unjustified and dictated more by traders' emotions than by actual risks for the industry, CNBC writes. The iShares Cybersecurity and Tech ETF (focused on cybersecurity and technology) has been falling steadily since Feb. 20, after AI startup Anthropic introduced a service that scans code for vulnerabilities and suggests improvements. Quotes of cybersecurity giants including CrowdStrike, Cloudfare and Okta have also sagged. The market fears that AI could radically change the rules of the game in the sector.

Anthropic's new Claude Code Security tool minimally overlaps with the major revenue streams of industry leaders, according to UBS analyst Roger Boyd.

"While we expect AI developers to deploy more cybersecurity products, it is unlikely that they will spend resources on building infrastructure controls such as endpoint agents, network security gateways, or identity authentication platforms," Boyd says. In contrast, cybersecurity players such as CrowdStrike, Okta and Zscaler may even benefit from the widespread adoption of AI by adapting their systems to meet new challenges, he believes.

Although Crowdstrike has lost more than 20% of its value since the beginning of the month and Zscaler has lost 28%, JPMorgan analysts, including Brian Essex, see investment opportunities. Essex also singled out Palo Alto Networks, Sailpoint and JFrog as resilient companies that face high demand for platform defense against attacks.

Morgan Stanley analyst Sanjit Singh reiterated an "outperform" rating for JFrog, explaining that the company's business is tied to protecting binaries, not just source code like Anthropic. He also called the sell-off in JFrog shares, which have fallen 36% in a month, excessive.

Analyst Dan Ives of Wedbush confirmed the status of CrowdStrike, Palo Alto Networks and Zscaler as long-term leaders in February. He believes AI will be a "tailwind" for the sector as hackers will use AI for cheaper and larger scale attacks, which will only increase demand for protection.

The iShares Cybersecurity and Tech ETF fell more than 3% on Friday, February 20, following the debut of Claude Code Security. Against that backdrop, shares of CrowdStrike and Cloudflare collapsed about 8% on Monday, February 20, and Okta collapsed more than 9%. On Monday, Feb. 23, the pressure continued, with the sector ETF losing another 4.7%, while CrowdStrike and Cloudflare again shed more than 9%.

Even though CrowdStrike shares have fallen 25% since the start of 2026, most analysts are advising them to buy. The securities have a combined 37 Buy and Overweight ratings versus 19 Hold (recommendation to hold), MarketWatch shows.

Cloudflare shares are also rather positively treated: they have 24 buy recommendations, ten hold recommendations and three sell recommendations. Okta shares are recommended to buy by 31 analysts, 14 more advise to hold and one advises to sell.

This article was AI-translated and verified by a human editor