CrowdStrike, Okta Surge on Strong Earnings as AI Threats Drive Cybersecurity Spending

CrowdStrike gained 15% and Okta climbed 20%. The broader cyber sector also rallied, with Palo Alto Networks, SailPoint and Rubrik each up about 9%. Both companies beat estimates for their fiscal second quarter and cited the AI agent threat as a key driver.

CrowdStrike CEO George Kurtz told analysts on Wednesday: "We're in an arms race. AI is driving more cyberattacks. AI is driving more cyber spending." He also said the company's flexible Falcon platform offering, which lets customers switch out security tools, doubled year over year.

Okta CEO Todd McKinnon said new products accounted for nearly a third of total bookings. On a Wednesday earnings call, he noted that adoption remains in early stages but momentum is growing, with dozens of AI deals won in the second quarter.

The earnings come amid recent high-profile AI-related incidents, including the release of Anthropic's Mythos model and the attack on OpenAI's Hugging Face platform, which have forced businesses to scale their security stacks. Identity security tools, which help manage the explosion of AI agents, have emerged as a clear winner, with both companies' shares up more than 80% this year.

Deutsche Bank analysts remain optimistic about the sector's growth in the AI era but are awaiting upcoming reports from Palo Alto Networks and Zscaler to solidify near-term demand trends. Bank of America upgraded Okta shares to neutral from underperform, citing accelerating AI growth, but warned that adoption is still very early and disclosed metrics remain limited.