Cybersecurity Stocks Decline Amid AI Tool Concerns
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 23 2026
0mins
Should l Buy FTNT?
Source: CNBC
- 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.
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Analyst Views on FTNT
Wall Street analysts forecast FTNT stock price to rise
24 Analyst Rating
3 Buy
18 Hold
3 Sell
Hold
Current: 79.180
Low
70.00
Averages
84.18
High
100.00
Current: 79.180
Low
70.00
Averages
84.18
High
100.00
About FTNT
Fortinet, Inc. is engaged in cybersecurity, driving the convergence of networking and security. The Company’s integrated platform, Fortinet Security Fabric, spans secure networking, unified Secure Access Service Edge (SASE) and artificial intelligence (AI)-driven security operations (SecOps). Its products and services include FortiOS, FortiASIC, FortiCloud, FortiAI, FortiEndpoint, and OT Security. The FortiGuard Labs is a cybersecurity threat intelligence and research organization comprised of experienced threat hunters, researchers, analysts, engineers and data scientists who develop and utilize machine learning and AI technologies. FortiGuard and Other Security Services are a suite of AI-powered security capabilities that are integrated as part of the Fortinet Security Fabric to deliver coordinated detection and enforcement across the entire attack surface. FortiCare Technical Support Service is a per-device technical support service. It also operates Fortinet Training Institute.
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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- Current Internet Blackout: Iran is experiencing a near-total internet blackout lasting over 48 hours amid ongoing conflict with the U.S. and Israel, with connectivity at just 1% of normal levels, severely impacting over 90 million citizens and highlighting the government's strict control over information flow.
- Historical Context: NetBlocks attributes this blackout to a 'regime-imposed' nationwide shutdown, reminiscent of a similar incident in January that lasted weeks and obscured severe human rights violations, indicating the government's tendency to employ such tactics during public protests to maintain control.
- Cyber Attack Threats: U.S. and Israeli cyberattacks have targeted Iranian internet infrastructure, with multiple government-aligned news websites hacked, and even the popular religious calendar app BadeSaba, with over 5 million downloads, compromised, indicating a psychological warfare strategy against the populace.
- Potential Cyber Retaliation: As Iran retaliates with strikes against U.S. and allied targets, analysts warn that Iranian-aligned groups may initiate cyber attacks, with CrowdStrike's head noting observed activities consistent with Iranian threat actors, suggesting that more aggressive cyber operations may be forthcoming.
See More
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- Producer Prices Rise: The US January Producer Price Index (PPI) increased by 0.5% month-over-month and 2.9% year-over-year, exceeding expectations, indicating rising inflationary pressures that could influence the Fed's interest rate decisions and increase market uncertainty.
- Strong Economic Data: Despite the market downturn, the February Chicago PMI unexpectedly rose to 57.7, signaling signs of economic expansion, which may alleviate some investor concerns about a slowdown in economic growth.
- Airline Stocks Under Pressure: With WTI crude oil prices reaching a 6.5-month high, airline stocks are generally declining, with United Airlines down over 8%, reflecting the potential threat of rising fuel costs on airline profitability.
See More
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- Market Decline: The S&P 500 index fell by 0.90%, the Dow Jones Industrial Average dropped by 1.57%, and the Nasdaq 100 index decreased by 0.71%, reflecting investor concerns over the disruptive potential of AI, which has intensified selling pressure across the market.
- Producer Prices Rise: The US January Producer Price Index (PPI) increased by 0.5% month-over-month and 2.9% year-over-year, surpassing expectations, indicating persistent inflationary pressures that may hinder the Fed's ability to cut interest rates in the near term, negatively impacting stock valuations.
- Geopolitical Risks Intensify: WTI crude oil prices surged over 2% to a 6.5-month high due to disappointing outcomes from US-Iran nuclear talks, raising concerns about potential supply disruptions and adding to investor anxiety in the stock market.
- Mixed Stock Performances: Dell Technologies surged over 10% following a strong sales forecast for its AI servers, while cybersecurity stocks like Zscaler plummeted over 11%, illustrating a divergence in market reactions and reflecting investor caution towards technology stocks.
See More
HSBC Remains Bullish on Software Sector Amid AI Concerns
- Market Panic Eases: Despite recent fears surrounding the SaaS model, HSBC analysts assert that the software sector will benefit from AI advancements rather than being displaced, reflecting confidence in the industry's resilience.
- Enterprise Software Advantage: HSBC highlights that consumer AI platform developers, such as Alphabet and OpenAI, lack the experience to create effective enterprise-class software in complex areas, thereby maintaining the competitive edge of existing software vendors.
- Investment Timing: Given that software sector valuations are at historical lows, HSBC recommends investors build or expand positions in the software space prior to a re-rating, anticipating strong demand growth for the sector.
- Future Outlook: HSBC predicts that while AI has been profitable for hardware and semiconductor sectors, the software industry will dominate value creation over the next two years, particularly post-2026, as software vendors leverage AI to generate superior products.
See More
Wall Street Sees Software Stock Recovery Amid AI Concerns
- Software Stock Recovery: After a historic sell-off, Wall Street identifies buying opportunities in software stocks, with the iShares Expanded Tech-Software Sector ETF rising nearly 1.8% on Tuesday, although it remains down over 25% year-to-date, indicating a gradual recovery in market confidence.
- AI Transition Opportunities: Analysts believe that while AI tools may threaten traditional software pricing power, companies like Intuit and CrowdStrike are seen as
See More
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- Market Volatility: The S&P 500 and Nasdaq Composite both dropped over 1%, while the Dow Jones Industrial Average plummeted more than 800 points due to new tariffs and fears surrounding artificial intelligence, indicating investor concerns about the economic outlook.
- Tariff Implications: Following the Supreme Court's tariff ruling, FedEx has sued the government for a full refund of tariffs paid, reflecting corporate dissatisfaction with the new tariff policies, which could further slow economic growth.
- AMD and Meta Partnership: Meta announced a multi-year deal with AMD to deploy up to 6 gigawatts of graphics processing units, resulting in a more than 13% surge in AMD's stock during premarket trading, showcasing its enhanced competitiveness in the AI chip market.
- New Drug Launch: Eli Lilly launched a new version of its Zepbound injection pen, offering a month's worth of doses at a starting price of $299, which is expected to enhance patient convenience and contributed to a nearly 5% rise in Lilly's stock price.
See More
