Netskope Reports Strong Q3 Growth Despite Stock Decline
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 12 2026
0mins
Should l Buy NTSK?
Source: seekingalpha
Netskope Inc's stock fell by 8.06% and crossed below the 20-day SMA amid a mixed market environment, with the Nasdaq-100 down 0.43% and the S&P 500 down 0.07%.
The decline comes despite Netskope's impressive Q3 performance, where the company reported a 33% year-over-year revenue growth to $184.2 million, significantly exceeding expectations. Analysts have raised their projections following the earnings report, highlighting strong demand for its cloud security solutions and improved cash flow performance. However, the stock price dropped by 11.4% to $20.81, indicating sector rotation as investors reacted to broader market conditions.
This performance reflects the ongoing challenges in the tech sector, where mixed earnings reports have created uncertainty. Despite the stock's decline, Netskope's strong fundamentals and positive analyst outlook suggest potential for recovery as the market stabilizes.
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Analyst Views on NTSK
Wall Street analysts forecast NTSK stock price to rise
11 Analyst Rating
11 Buy
0 Hold
0 Sell
Strong Buy
Current: 11.530
Low
23.00
Averages
26.40
High
30.00
Current: 11.530
Low
23.00
Averages
26.40
High
30.00
About NTSK
Netskope, Inc. is a cybersecurity company that provides security, networking, and analytics solutions to organizations ranging from macro to mid-sized companies. The Company delivers its offerings through a software-as-a-service business model, selling subscriptions that provide customers with access to its platform along with related support services. Its Netskope One platform is a comprehensive solution that integrates security, networking, and analytics products into a single, unified platform. Its products include Security Products, Network Products, and Analytics Products. Security products include Cloud Inline Security, Cloud Access Security Broker, Threat Protection, Next-Gen Secure Web Gateway, Private Access, Enterprise Browser, and others. Networking products include Firewall-as-a-Service, Software-Defined Wide Area Network, Cloud Packet Stream, and others. Analytics products include Advanced Analytics, User and Entity Behavior Analytics, and Digital Experience Management.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- New Tool Launch: Anthropic's newly launched security tool, capable of scanning software code for vulnerabilities and suggesting solutions, triggered market panic, leading to significant declines in cybersecurity stocks.
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- AI Fast Path Launch: Netskope introduces NewEdge AI Fast Path, designed to optimize network paths for AI applications, significantly reducing latency and costs, thereby enhancing operational efficiency and security for enterprises in the AI era.
- Balancing Security and Speed: A survey reveals that only 18% of infrastructure leaders are confident that their current team and budget can meet AI performance and security demands; Netskope eliminates the trade-offs between security and user experience, facilitating broader AI adoption.
- Global Data Center Expansion: With over 120 data centers across 75 regions, Netskope ensures that each location provides full compute capabilities and SASE stacks, enabling enterprises to quickly access AI services and enhancing business continuity and resilience.
- Innovative Route Control Technology: The NewEdge Route Control technology makes tens of thousands of route changes daily to ensure fast access to AI destinations while bolstering network resilience against internet congestion or ISP connectivity issues, further improving user experience.
See More
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- Market Panic Intensifies: Cybersecurity stocks faced a sell-off due to fears of AI disruption, with the iShares Cybersecurity and Tech ETF (IHAK) dropping over 3% on Friday, while major players like CrowdStrike and Cloudflare fell around 8%.
- Investor Reaction Misaligned: Despite Anthropic's launch of the Claude Code Security tool, UBS believes there is little overlap with major cybersecurity companies' revenue streams, indicating that the market's reaction is more panic-driven than based on reality.
- Poor Company Performance: Month-to-date, CrowdStrike has lost over 20% of its value, Okta is down nearly 18%, and Zscaler has shed 28%, reflecting a trend of indiscriminate selling within the sector.
- Long-Term Investment Opportunities: Despite short-term pressures, JPMorgan sees these companies as investment opportunities, with analysts noting that CrowdStrike, Okta, and Zscaler may benefit from high demand for cybersecurity as AI adoption increases.
See More
Cybersecurity Stocks Decline Amid AI Tool Concerns
- Market Reaction: Cybersecurity stocks fell for the second consecutive day on Monday, with CrowdStrike and Zscaler dropping about 9% each, while Netskope declined nearly 10%, reflecting investor concerns over new AI security tools potentially displacing traditional business models.
- New Product Launch: Anthropic debuted a new security tool for its Claude model on Friday, capable of scanning software code for vulnerabilities and suggesting solutions, with an enterprise briefing scheduled for Tuesday, further heightening market interest.
- Industry Leader's Perspective: CrowdStrike CEO George Kurtz defended on LinkedIn that AI's ability to scan code does not replace the Falcon platform, emphasizing that security requires an independent, battle-tested platform to prevent breaches.
- Analyst Insights: Despite rising fears that AI could replace cybersecurity roles, Bank of America analysts argue that the new AI tool poses a threat primarily to code scanning platforms, asserting that it lacks the visibility and reliability to replace end-to-end security solutions while potentially enhancing efficiency in specific workflows.
See More
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- Market Reaction: Cybersecurity stocks fell for the second consecutive day, with CrowdStrike and Zscaler dropping about 9% each, and Netskope declining nearly 10%, reflecting investor concerns over new AI tools potentially displacing traditional business models.
- New Tool Launch: Anthropic's newly launched security tool, capable of scanning software code for vulnerabilities and suggesting solutions, triggered market panic, leading to significant declines in cybersecurity stocks.
- Industry Defense: CrowdStrike CEO George Kurtz defended the company's position on LinkedIn, asserting that the new AI tool does not replace its well-known Falcon system, emphasizing that security requires a proven platform to prevent breaches.
- Software Sector Impact: The rapid development of AI tools has also rattled the software sector, with Salesforce and ServiceNow losing approximately one-third and 34% of their market value respectively, indicating the potential threat of AI across multiple industries.
See More
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- Market Rebound Expectations: JPMorgan believes that while the market's outlook on AI disruption in the software sector is overly pessimistic, certain software companies are demonstrating greater resilience, potentially providing rebound opportunities for investors, especially given the current overly bearish sentiment.
- Extreme Price Volatility: Analysts point out that the extreme price action in software stocks has led to unrealistic expectations regarding AI disruption, which may prompt a rotation back into higher-quality companies, thereby improving portfolio performance.
- AI Profitability Gains: Companies in the S&P 500 that have adopted AI have seen net margins expand by approximately 2 to 3 percentage points more than their peers, indicating that AI technology is already delivering productivity gains and reflecting that corporate adoption is enhancing profitability.
- ETF Performance Decline: The State Street SPDR S&P Software & Services ETF (NYSE:XSW) is down 20.58% year-to-date, illustrating the overall pessimistic sentiment towards the software sector, despite some companies potentially benefiting from AI infrastructure demand.
See More
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Market Impact: The software sector has experienced a $2 trillion loss due to concerns over potential disruptions from artificial intelligence technology.
Investment Perspective: Analysts at J.P. Morgan view this downturn as a buying opportunity and have identified several AI-resistant companies, including Microsoft and CrowdStrike.
See More
