CrowdStrike and Palo Alto Networks Hit Record Highs as AI Agents Reshape Cybersecurity Landscape

Jim Cramer says these 2 cybersecurity stocks can keep climbing as AI threats grow

CNBC's Jim Cramer said Monday investors shouldn't be scared away from cybersecurity stocks that have already rallied. Cybersecurity stocks struggled during the first half of the year as they were swept up in the broader software sell-off, with investors worried AI could disrupt traditional software business models and erode pricing power. However, the group has come roaring back as Wall Street increasingly views AI as a reason companies will need to spend more, not less, on protection from digital threats. CrowdStrike and Palo Alto shares climbed 84% and 106%, respectively, so far this year. Cramer's Charitable Trust owns shares of both CrowdStrike and Palo Alto. Cramer doesn't think those runs are over. "This is a market that's different than any other. ... The problem is that the earnings are exploding for these companies, so therefore we have to take their P/Es [price-to-earnings ratios] up," he said on " Squawk on the Street ." He pointed to bullish calls from TD Cowen, which raised its price target on CrowdStrike to $235 from $175 and Palo Alto to $400 from $360, while maintaining buy ratings on both stocks. The firm said both companies are benefiting from strong cybersecurity demand fueled by AI. Cramer pushed back against the idea that AI developers can provide enough protection themselves. Instead, he argued the growing number of cyberattacks reinforces the need for dedicated cybersecurity providers. "I think that you would sell it if you felt that there weren't going to be any hacks," he said. "And yet you look at the hacks, and they're so myriad." He said the expanding threat landscape, coupled with more companies moving their data and computing operations to cloud-based systems, gives cybersecurity companies a long runway for growth. He highlighted CrowdStrike in particular. "You go to the cloud, you need to be protected by CrowdStrike," Cramer said. "They're cloud native, and the business is only 15% penetrated." That opportunity is why Cramer says investors shouldn't automatically take profits just because cybersecurity stocks have already posted significant gains. "I think the answer is CrowdStrike goes higher," he said.

Cybersecurity stocks hit record highs after Black Hat

CrowdStrike and Palo Alto Networks both jumped more than 5% on Monday. One freshly raised price target was overtaken within hours. CrowdStrike and Palo Alto Networks hit record highs on Monday. Each rose more than 5%, after a week in which the Black Hat conference in Las Vegas turned into an argument about AI agents. CNBC's Samantha Subin reported the move. CrowdStrike gained 11.32 points, or 5.28%. Palo Alto added 17.84 points, or 4.90%, and traded at $381.70 in the afternoon. The rest of the sector followed. Tenable and Rubrik rose more than 7%. Netskope and Zscaler each gained about 5%. A price target overtaken the same day BTIG lifted its price target on Palo Alto to $380 on Monday. The firm called that about 4% upside from Friday's close. The stock passed it within hours. Palo Alto changed hands at $381.70 that afternoon, above a target raised the same morning. Buyers are repricing this sector faster than the analysts who cover it. CrowdStrike's target went to $237, which BTIG put at 11% upside from Friday. Rubrik went to $109. None of the three revisions followed an earnings release. What changed at Black Hat BTIG's analysts spent the conference talking to partners, vendors and customers. The consistent theme, they wrote, was that AI agents "have fundamentally changed the threat landscape." They called the environment meaningfully worse than before. They also said the deployment of AI security tools sits "only in the early innings". Cantor's analysts reached a similar view. AI has moved "from being a cybersecurity feature to a key pillar" of both the attack surface and the infrastructure on either side of it, they wrote. The trade has a name on television too. Jefferies analyst Joseph Gallo argued last week that cyber spending will benefit from AI anxiety over the next couple of quarters. The week supplied its own evidence Black Hat did not lack for demonstrations. Researchers used the conference to pick apart a Hugging Face breach carried out by an AI agent rather than a person. The pattern is no longer theoretical. Security firms have already documented an end-to-end ransomware attack run by an agent from reconnaissance through to extortion. Private money is moving on the same thesis. Mate Security raised $50m for AI-driven security operations during the same conference week. What Monday does not prove This was one trading session on sell-side commentary. Neither company reported results, and no customer contract was announced. Analyst notes move stocks, but they are not revenue. There is a circularity worth naming. The companies whose shares rose are the ones selling the fix for the threat their own conference describes, and BTIG says that build-out has barely started. Spending is also not the same as safety. Buying more tools has never closed the remediation gap between finding a problem and fixing it. Palo Alto has its own unfinished argument here. Its chief executive Nikesh Arora has said AI token pricing must fall before the economics of agentic security work at scale. The test arrives with results. Targets can be raised again, and often are, but the claim that AI has changed the threat landscape only pays off if customers spend against it. Until then, Monday's records rest on a week of conversations in Las Vegas.

CrowdStrike, Palo Alto hit records after Black Hat cyber conference illuminates rising AI threat

Cybersecurity stocks CrowdStrike and Palo Alto Networks jumped more than 5% to new highs on Monday on renewed demand for artificial intelligence security tools following the industry's annual Black Hat conference in Las Vegas. "The single most consistent theme across our conversations -- partners, vendors, and customers alike -- was that AI agents have fundamentally changed the threat landscape," wrote analysts at BTIG in a note to clients. While AI agents have become the predominant attack threat and the environment is "meaningfully worse," deployment and AI security tools are only in the early innings," they added. Businesses are turning to cybersecurity companies for new agentic tools to fend off adversaries in a hyper-accelerated threat landscape fueled by new cyber models. Executives and potential customers gathered in Las Vegas last week in search of answers and ways to secure systems from rogue AI agents.

Cybersecurity Stocks Surge, With Palo Alto Networks and CrowdStrike Leading the Charge

Get personalized, AI-powered answers built on 27+ years of trusted expertise. Cybersecurity stocks were a bright spot in Monday's trading at a time when broader markets declined. Palo Alto Networks (PANW) and CrowdStrike (CRWD) were among the biggest gainers in the S&P 500 Monday. Their shares jumped 6% and 5%, respectively, to set closing records. Fortinet (FTNT), Cloudflare (NET) and SentinelOne (S) also climbed. Analysts from Deutsche Bank said in a note to clients Monday that they came away from a cybersecurity industry event last week more bullish on the sector, pointing to the "pace and scale of AI innovation across the industry." They called Palo Alto Networks their "top pick," citing its "role in defining the market." In a report Friday, Citrini Research also highlighted Palo Alto Networks as a likely beneficiary of growing AI adoption and risks, along with Cloudflare and Fortinet, among others. The increase in interest in cybersecurity stocks comes as OpenAI, Anthropic, and Meta Platforms (META) have all said in recent weeks that their models hacked into outside companies during internal testing, raising cybersecurity concerns. Monday's gains extend what's been a strong stretch for many cybersecurity stocks. CrowdStrike shares have nearly doubled in value this year, while Palo Alto Networks and Fortinet shares have more than doubled year-to-date. SentinelOne shares are up close to 50%.