Okta and CrowdStrike led a broad cybersecurity rally after both beat Wall Street estimates and raised their forecasts, citing rising AI-driven cyberattacks and adoption. Okta shares jumped 29% and CrowdStrike gained 19%, with peers across the sector also climbing.
Okta and CrowdStrike beat estimates and raise guidance
Okta's stock surged 29% and CrowdStrike's climbed 19% after both companies beat Wall Street's fiscal second-quarter estimates and raised their forecasts, citing rising AI agent threats. The broader cybersecurity sector rallied as well, with shares of Palo Alto Networks, SailPoint, Zscaler and Rubrik up at least 10% each.
CrowdStrike CEO George Kurtz told analysts on Wednesday: "We're in an arms race", pointing to AI as a driver behind both more cyberattacks and more cyber spending. He said the company's flexible Falcon platform offering, which lets customers switch out security tools, doubled year over year.
AI models and hacks raise the stakes
The release of advanced AI models and recent hacks, including the OpenAI-Hugging Face incident, have raised the stakes for the cybersecurity sector in recent months. As a result, businesses are scaling their security stacks to combat attacks orchestrated by AI agents. Identity security tools that help manage the growth in AI agents have been a clear winner, and both CrowdStrike and Okta are up more than 80% each amid the sector's climb to fresh highs.
Okta touts early AI traction
Okta CEO Todd McKinnon touted the company's early success with new products, which accounted for nearly a third of total bookings. He said adoption remains in its early stages, but momentum is growing. Following the results, analysts at Bank of America upgraded Okta shares to neutral from underperform, though they warned of limited upside ahead.
Analysts at Deutsche Bank said they remain optimistic about the sector's growth in the AI era, but are waiting on upcoming reports to confirm near-term demand trends. Palo Alto Networks and Zscaler are among the companies set to report next week.
Source: CNBC
Trading involves risk.
Risk Disclaimer
