Okta shares jumped 27 percent and CrowdStrike climbed 18 percent Thursday after both companies reported fiscal second-quarter results that beat consensus and lifted full-year guidance, citing a surge in spending tied to AI-agent threats. The moves pushed each stock more than 80 percent higher for the year and lifted peers including Palo Alto Networks, SailPoint, Zscaler and Rubrik by at least 10 percent apiece.
The arms race narrative
CrowdStrike chief executive George Kurtz described an arms race on Wednesday's call, saying AI is simultaneously driving more attacks, more spending and a widening gap between vendors that solve problems and those that compound them. The company's Falcon platform, which lets customers swap security modules, doubled year over year. Kurtz is scheduled to appear on CNBC's Mad Money at 6 p.m. ET.
Identity tools lead the charge
Okta chief executive Todd McKinnon said new products generated nearly a third of total bookings in the quarter, with dozens of AI-related deals closed while adoption remains early. The OpenAI-Hugging Face breach and the release of Anthropic's Mythos model have forced enterprises to expand identity controls for the growing population of autonomous agents.
Deutsche Bank waits for confirmation
Analysts at Deutsche Bank said they remain optimistic on the sector's AI-era growth trajectory but are holding judgment on near-term demand until Palo Alto Networks and Zscaler report next week, marking the unofficial start of the cyber earnings season.
Bank of America sees limited upside
Bank of America upgraded Okta to neutral from underperform, citing accelerating AI traction, but flagged that disclosed metrics are thin and management still treats AI as immaterial to fiscal 2027 results. The firm warned that upside from here is constrained.