Cybersecurity stocks drop on Anthropic AI disruption fears

Cybersecurity stocks dropped for a second day on Monday as investors fretted over new artificial intelligence security tools that threaten to displace the sector’s longstanding business models.

Anthropic on Friday debuted a new security tool to its Claude model in a limited research preview. The AI lab said the service could scan software code for vulnerabilities and suggest solutions. Anthropic is scheduled to host an enterprise briefing with new product announcements on Tuesday.

CrowdStrike and Zscaler dropped about 10% each on Monday, while Netskope and Tenable plummeted about 12%. SailPoint fell 9%, Okta declined more than 6%, while SentinelOne and Fortinet each lost more than 4%. Palo Alto Networks was last down 3%, while Cloudflare, which benefited from recent Moltbot enthusiasm, dropped over 9%.

The iShares Cybersecurity & Tech ETF dropped about 5% and the Global X Cyberseurity ETF fell to its lowest level since November 2023.

In a post to LinkedIn over the weekend, CrowdStrike CEO George Kurtz defended his company’s moat in a world filled with new AI offerings.

“AI innovation is inspiring,” he wrote. “But let’s stay grounded in reality: an AI capability that scans code does not replace the Falcon platform—or your security program. Security requires an independent, battle-tested platform built to stop breaches.”

During an earnings call with analysts last week, Palo Alto CEO Nikesh Arora said he was “confused” why the market viewed AI as a threat to cybersecurity and that customers want more AI to scale their security stack.

New AI tools capable of quickly creating websites and apps through prompts and texts have rattled the software sector in recent months. Since the start of this year, software giant Salesforce has lost about one-third of its value, and ServiceNow has plummeted more than 34%. Microsoft has shed about a fifth of its value.

Cybersecurity is now feeling the pinch.

But some analysts challenged fears that AI may automate some common cybersecurity tasks. Bank of America said the Anthropic tool only poses a significant threat to code scanning platforms such as GitLab and JFrog, which plummeted 8% and 25%, respectively, on Friday.

“We think that AI could improve efficiency in specific workflows, particularly code scanning, but does not now have the visibility, control, or reliability to replace end-to-end security platforms,” the analysts wrote.

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