Investors are fleeing cybersecurity stocks amid fears that emerging AI tools could disrupt the sector, overshadowing strong fundamentals. This sell-off began after Anthropic’s launch of Claude Code, an AI assistant that identifies coding vulnerabilities. CrowdStrike dropped 8% on Friday and 9% on Monday, while Palo Alto Networks saw declines of 1.5% and 2.5%. Notably, CNBC’s Jim Cramer and analyst Jeff Marks emphasize that cyber stocks shouldn’t be grouped with broader software declines, as companies cannot compromise on cybersecurity. Analysts from JPMorgan and UBS affirm that cybersecurity firms like CrowdStrike and Palo Alto Networks are resilient to AI-related disruptions, given their unique security offerings. They believe that AI coding assistants enhance software quality without replacing robust security platforms. Despite the current market turmoil, Cramer asserts a long-term investment approach focused on fundamentals, indicating that they will hold onto their positions until market fears subside.
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