Cybersecurity Stocks Face Selloff After Anthropic Announcement
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Should l Buy OKTA?
Source: stocktwits
- Market Reaction Incongruity: Barclays analysts noted that the selloff in the cybersecurity sector following Anthropic's announcement seems illogical, asserting that the new code security tool does not pose competition to any of the businesses they cover, indicating an overreaction in market sentiment.
- Significant Stock Declines: On Friday, shares of CrowdStrike (CRWD) fell nearly 8%, while Okta (OKTA) dropped over 9%, and Cloudflare (NET) also saw an 8% decline, reflecting investor concerns over the new feature despite analysts deeming it non-threatening.
- Introduction of New Feature: Anthropic's Claude Code Security aims to assist security teams in detecting complex software vulnerabilities and suggesting targeted fixes, thereby enhancing defenses against emerging AI threats, indicating a rising demand for AI security tools in the market.
- Investor Sentiment Analysis: Despite CRWD and OKTA shares declining over 10% and 21% respectively over the past year, retail sentiment on Stocktwits remains bullish for both, suggesting market expectations for a potential rebound in the future.
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Analyst Views on OKTA
Wall Street analysts forecast OKTA stock price to rise
31 Analyst Rating
22 Buy
8 Hold
1 Sell
Moderate Buy
Current: 81.800
Low
75.00
Averages
114.03
High
145.00
Current: 81.800
Low
75.00
Averages
114.03
High
145.00
About OKTA
Okta, Inc. is an independent identity partner. The Company’s Okta Platform and Auth () Platform enable its customers to securely connect the right people to the right technologies and services at the right time. It offers independent and neutral cloud-based identity solutions that allow customers to integrate with nearly any application, service or cloud that they choose through its platforms. Organizations use the Company’s Identity Platform to collaborate with their partners, and to provide their customers with secure experiences in the cloud and via mobile devices. Developers leverage the Workforce Identity Cloud and Customer Identity Cloud, powered by Auth (), to securely and efficiently embed identity into the software they build, allowing them to innovate and focus on their core missions. Its Okta Platform enables its customers to automate and secure access across their ecosystem of employees, contractors and partners, increasing collaboration across their workforces.
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.
Cybersecurity Stocks Face Selloff After Anthropic Announcement
- Market Reaction Incongruity: Barclays analysts noted that the selloff in the cybersecurity sector following Anthropic's announcement seems illogical, asserting that the new code security tool does not pose competition to any of the businesses they cover, indicating an overreaction in market sentiment.
- Significant Stock Declines: On Friday, shares of CrowdStrike (CRWD) fell nearly 8%, while Okta (OKTA) dropped over 9%, and Cloudflare (NET) also saw an 8% decline, reflecting investor concerns over the new feature despite analysts deeming it non-threatening.
- Introduction of New Feature: Anthropic's Claude Code Security aims to assist security teams in detecting complex software vulnerabilities and suggesting targeted fixes, thereby enhancing defenses against emerging AI threats, indicating a rising demand for AI security tools in the market.
- Investor Sentiment Analysis: Despite CRWD and OKTA shares declining over 10% and 21% respectively over the past year, retail sentiment on Stocktwits remains bullish for both, suggesting market expectations for a potential rebound in the future.
See More
U.S. Markets Increased on Friday; First Majestic Silver Saw the Largest Gain
- U.S. Stock Market Performance: Stock indexes in the U.S. experienced gains on Friday, with the overall market climbing.
- Index Increases: The S&P 500 rose by 0.90%, the Dow Jones increased by 0.69%, and the Nasdaq saw a rise of 0.47%.
See More
Caterpillar and Okta: Top Stocks to Buy and Hold for the Next Decade
- Caterpillar's Dual AI Advantage: Caterpillar benefits from AI growth through its construction equipment needed for data centers and soaring performance in its Power & Energy segment, with projected revenue of $67.6 billion in 2025, a 4% increase, and Power & Energy sales reaching $9.4 billion, up 23% year-over-year.
- Strong Backlog: The company reported a record backlog of $51.2 billion in Q4 2023, indicating robust future demand, particularly bolstered by a power supply agreement with American Intelligence and Power, which will drive future growth.
- Okta's Market Leadership: As a leader in cybersecurity, Okta focuses on zero-trust identity and access management, forecasting revenue of around $2.9 billion in 2026, an 11% increase, demonstrating resilience in a competitive landscape.
- AI Security Solution Innovation: Okta is leveraging AI to enhance its Identity Threat Protection capabilities, detecting behavioral shifts to prevent bot-driven fraud, and despite competition from Microsoft and CrowdStrike, its leadership in AI security continues to strengthen.
See More
Anthropic Launches Claude Sonnet 4.6, Disrupting Software Industry
- Product Launch: Anthropic's release of Claude Sonnet 4.6 on Tuesday, following closely behind Claude Opus 4.6, creates a significant market impact, leading to pressure on traditional software companies, particularly with Microsoft shares down 18% in 2026.
- Investor Concerns: Investors are increasingly worried that advanced AI agents may render traditional user interfaces and subscription models obsolete, raising questions about the future of the software industry.
- Technological Shift: Anthropic highlighted in a blog post that Sonnet 4.6 can use computers like a human, changing the way users interact with traditional software and reducing the need for bespoke connectors, thereby enhancing automation capabilities.
- Industry Impact: With the launch of Sonnet 4.6, the performance threshold for traditional software tasks has been lowered, allowing economically valuable tasks that previously required Opus-class models to be accomplished with Sonnet 4.6, intensifying market competition.
See More
JPMorgan: AI Disruption Fears Overstated for Software Sector
- 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
Investment Opportunities Amid Software Stock Slump
- Current Software Market: Despite the Dow Jones Industrial Average surpassing 50,000 and the S&P 500 gaining at least 16% in six of the last seven years, the iShares Expanded Tech-Software Sector ETF is nearly 28% below its all-time high, indicating that software stocks are in a bear market, presenting opportunities for value investors.
- Salesforce Growth Potential: Salesforce's Agentforce AI platform generated over $500 million in annual recurring revenue in Q3, up 330% year-over-year, and despite AI competition concerns, its leadership in the CRM market and strategic acquisition capabilities sustain high growth, with a forward P/E ratio of just 14.8, representing a 52% discount to its historical average.
- Adobe's Performance Recovery: Adobe's Digital Media segment achieved $19.2 billion in annual recurring revenue for FY 2025, an 11.5% increase, and despite fears surrounding generative AI, its strong cash flow and share buyback program (30.8 million shares in FY 2025) indicate financial health, with a forward P/E of 10.1, 61% below its historical average.
- Okta's Rising Security Demand: Okta's RPO increased 17% year-over-year to nearly $4.3 billion in Q3, as the shift of enterprise data to the cloud boosts cybersecurity demand; its AI-driven platform provides identity authentication and application authorization, and while facing AI competition, its forward P/E of 24 shows relative attractiveness.
See More
Cybersecurity Stocks Face Selloff After Anthropic Announcement
- Market Reaction Incongruity: Barclays analysts noted that the selloff in the cybersecurity sector following Anthropic's announcement seems illogical, asserting that the new code security tool does not pose competition to any of the businesses they cover, indicating an overreaction in market sentiment.
- Significant Stock Declines: On Friday, shares of CrowdStrike (CRWD) fell nearly 8%, while Okta (OKTA) dropped over 9%, and Cloudflare (NET) also saw an 8% decline, reflecting investor concerns over the new feature despite analysts deeming it non-threatening.
- Introduction of New Feature: Anthropic's Claude Code Security aims to assist security teams in detecting complex software vulnerabilities and suggesting targeted fixes, thereby enhancing defenses against emerging AI threats, indicating a rising demand for AI security tools in the market.
- Investor Sentiment Analysis: Despite CRWD and OKTA shares declining over 10% and 21% respectively over the past year, retail sentiment on Stocktwits remains bullish for both, suggesting market expectations for a potential rebound in the future.
See More
U.S. Markets Increased on Friday; First Majestic Silver Saw the Largest Gain
- U.S. Stock Market Performance: Stock indexes in the U.S. experienced gains on Friday, with the overall market climbing.
- Index Increases: The S&P 500 rose by 0.90%, the Dow Jones increased by 0.69%, and the Nasdaq saw a rise of 0.47%.
See More
Caterpillar and Okta: Top Stocks to Buy and Hold for the Next Decade
- Caterpillar's Dual AI Advantage: Caterpillar benefits from AI growth through its construction equipment needed for data centers and soaring performance in its Power & Energy segment, with projected revenue of $67.6 billion in 2025, a 4% increase, and Power & Energy sales reaching $9.4 billion, up 23% year-over-year.
- Strong Backlog: The company reported a record backlog of $51.2 billion in Q4 2023, indicating robust future demand, particularly bolstered by a power supply agreement with American Intelligence and Power, which will drive future growth.
- Okta's Market Leadership: As a leader in cybersecurity, Okta focuses on zero-trust identity and access management, forecasting revenue of around $2.9 billion in 2026, an 11% increase, demonstrating resilience in a competitive landscape.
- AI Security Solution Innovation: Okta is leveraging AI to enhance its Identity Threat Protection capabilities, detecting behavioral shifts to prevent bot-driven fraud, and despite competition from Microsoft and CrowdStrike, its leadership in AI security continues to strengthen.
See More
Anthropic Launches Claude Sonnet 4.6, Disrupting Software Industry
- Product Launch: Anthropic's release of Claude Sonnet 4.6 on Tuesday, following closely behind Claude Opus 4.6, creates a significant market impact, leading to pressure on traditional software companies, particularly with Microsoft shares down 18% in 2026.
- Investor Concerns: Investors are increasingly worried that advanced AI agents may render traditional user interfaces and subscription models obsolete, raising questions about the future of the software industry.
- Technological Shift: Anthropic highlighted in a blog post that Sonnet 4.6 can use computers like a human, changing the way users interact with traditional software and reducing the need for bespoke connectors, thereby enhancing automation capabilities.
- Industry Impact: With the launch of Sonnet 4.6, the performance threshold for traditional software tasks has been lowered, allowing economically valuable tasks that previously required Opus-class models to be accomplished with Sonnet 4.6, intensifying market competition.
See More
JPMorgan: AI Disruption Fears Overstated for Software Sector
- 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
Investment Opportunities Amid Software Stock Slump
- Current Software Market: Despite the Dow Jones Industrial Average surpassing 50,000 and the S&P 500 gaining at least 16% in six of the last seven years, the iShares Expanded Tech-Software Sector ETF is nearly 28% below its all-time high, indicating that software stocks are in a bear market, presenting opportunities for value investors.
- Salesforce Growth Potential: Salesforce's Agentforce AI platform generated over $500 million in annual recurring revenue in Q3, up 330% year-over-year, and despite AI competition concerns, its leadership in the CRM market and strategic acquisition capabilities sustain high growth, with a forward P/E ratio of just 14.8, representing a 52% discount to its historical average.
- Adobe's Performance Recovery: Adobe's Digital Media segment achieved $19.2 billion in annual recurring revenue for FY 2025, an 11.5% increase, and despite fears surrounding generative AI, its strong cash flow and share buyback program (30.8 million shares in FY 2025) indicate financial health, with a forward P/E of 10.1, 61% below its historical average.
- Okta's Rising Security Demand: Okta's RPO increased 17% year-over-year to nearly $4.3 billion in Q3, as the shift of enterprise data to the cloud boosts cybersecurity demand; its AI-driven platform provides identity authentication and application authorization, and while facing AI competition, its forward P/E of 24 shows relative attractiveness.
See More
