Cybersecurity stocks drop for a second day as new Anthropic tool fuels AI disruption fears

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CrowdStrike CEO George Kurtz speaks at the Wall Street Journal Tech Live conference in Laguna Beach, California, on Oct. 21, 2019.

Martina Albertazzi | Bloomberg | Getty Images

Cybersecurity stocks dropped for a second day on Monday as investors fretted over new artificial intelligence security tools that threaten to displace the sector’s longstanding business models.

Anthropic on Friday debuted a new security tool to its Claude model that the AI lab said could scan software code for vulnerabilities and suggest solutions.

The move led to a freefall in cyber stocks that spilled over into Monday’s session, raising concerns that these tools could replace tasks handled by cybersecurity companies.

CrowdStrike and Zscaler dropped about 9% each, while Netskope declined nearly 10%. SailPoint fell 6%, while Okta, SentinelOne and Fortinet lost more than 4% each. Palo Alto Networks was last down 2%, while Cloudflare, which benefited from recent Moltbot enthusiasm, dropped 7%. The iShares Cybersecurity & Tech ETF dropped nearly 4%.

In a post to LinkedIn over the weekend, CrowdStrike CEO George Kurtz defended the company’s moat and said the new AI tool addresses different cybersecurity issues than the Austin-based company.

“AI innovation is inspiring,” he wrote. “But let’s stay grounded in reality: an AI capability that scans code does not replace the Falcon platform—or your security program. Security requires an independent, battle-tested platform built to stop breaches.”

New AI tools capable of quickly creating websites and apps through prompts and texts have rattled the software sector in recent months. Cybersecurity is just the latest sector to feel the pinch.

Since the start of this year, software giant Salesforce has lost about one-third of its value and ServiceNow has plummeted more than 34%. Microsoft has shed about a fifth of its value.

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