Cybersecurity stocks fell for a second day on Monday as fears grew over artificial intelligence tools disrupting the sector.
Anthropic unveiled an experimental AI code scanner for its Claude platform on Friday. Offered in limited research preview, it identifies software flaws and suggests fixes. The firm plans enterprise updates on Tuesday.
Shares tumbled across the sector. CrowdStrike and Zscaler each shed nearly 10 per cent, while Netskope and Tenable plunged 12 per cent. SailPoint dropped 9 per cent, Okta more than 6 per cent, and SentinelOne with Fortinet over 4 per cent apiece. Palo Alto fell 3 per cent, and Cloudflare lost over 9 per cent. The iShares Cybersecurity and Tech ETF declined 5 per cent, sending the Global X Cybersecurity ETF to a near three-year low.
CrowdStrike CEO George Kurtz countered the panic on LinkedIn. “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.”
Palo Alto CEO Nikesh Arora dismissed AI threat fears in recent earnings remarks. Clients want more AI for robust defences, he said.
Broader software woes compound the pressure. Salesforce has lost a third of its value this year, ServiceNow over 34 per cent, Microsoft 20 per cent. Bank of America analysts see limited risk.
They note the tool mainly challenges code scanners like GitLab and JFrog. “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,” they wrote.
As Tuesday’s event nears, questions linger over AI’s role in the $200 billion cybersecurity arena.