US Stock Movement | Cybersecurity Stocks Rebound as Morgan Stanley Points Out AI Driving Incremental Security Opportunities Worth Up to $220 Billions

Gelonghui April 21 — Cybersecurity concept stocks collectively rebounded, with Zscaler up 6.8%, CrowdStrike and Okta rising over 5%, Palo Alto Networks up 4.5%, Datadog and Fortinet increasing by about 3.3%, and Cloudflare up 2.4%.

On the news front, in recent weeks, Anthropic released Claude Code Security and announced that the Mythos AI model achieved a perfect score in its own cybersecurity benchmark test, causing market panic over AI upending the cybersecurity industry. However, the latest report from Morgan Stanley pointed out that this sell-off reflects a structural misjudgment by the market regarding AI threats, rather than an actual deterioration of fundamentals. Investors have underestimated the expansion in defensive demand brought by AI but have overestimated its disruptive threat to existing vendors. Morgan Stanley expects the incremental security opportunities driven by AI to reach as much as $220 billion, several times the current market share at risk of disruption, which is about 10%. In fact, the net size of the cybersecurity software market is expected to be about 10% higher than it is today.