AI Threats Supercharge Cyber Stocks but Earnings Fail to Impress
Cybersecurity stocks are getting hacked by their own sky-high expectations. Palo Alto Networks and CrowdStrike both topped estimates this week, but shares slipped as investors took profits after a huge run. The Global X Cybersecurity ETF has added ~$280B in market value this year, including a 37% jump in May — its best month since launching in 2019.
- CrowdStrike posted Q1 a 26% year-over-year revenue increase, and announced a four-for-one stock split, but shares fell 9% after earnings.
- Palo Alto’s revenue rose to $3B, prompting a higher full-year outlook of ~$11.43B, though shares slipped ~6%.
Cyber’s AI moment: CEO Nikesh Arora pushed back on “SaaS-Pocalypse” fears, arguing AI is “acting more as a tailwind to the cybersecurity industry as opposed to the death of the cybersecurity industry.” CrowdStrike CEO George Kurtz struck a similar tone, describing the company as “AI security infrastructure, critical to successful AI adoption.” Still, with both stocks up ~60% this year, clearing the bar isn’t enough when investors want a leap.
