Cybersecurity stocks posted a historic outperformance over chip stocks Monday after Anthropic CEO Dario Amodei raised fresh alarms about the pace of AI development. CrowdStrike closed at an all-time high and Palo Alto Networks logged its biggest move since April 2025, as analysts argued tighter AI scrutiny only reinforces demand for security spending.
Cybersecurity stocks were the top performers in the S&P 500 on Monday, as the technology trade split sharply between AI-safety winners and losers. Shares of CrowdStrike Holdings rose 13.8% Monday, marking an all-time closing high, according to Dow Jones Market Data. Palo Alto Networks' stock gained 13% for its largest move since April 2025. Fortinet's stock was up 9% at the close.
Software beats chips by a record margin
The rally in security names lifted the wider software sector against chipmakers. The iShares Expanded Tech-Software Sector ETF beat the iShares Semiconductor ETF by 10.67 percentage points Monday, which Dow Jones Market Data said was the largest single-day outperformance in history.
Amodei's AI-safety warning splits the trade
Over the weekend, Amodei outlined concerns about the accelerating speed of AI development, warning that models could soon become powerful enough to spur bots to take over the internet. He called for major players to pace themselves and focus on safer AI progress. In a blog post, he cited worries about recursive self-improvement, where a model reaches the point of training and improving itself, and referenced a recent attack on the Hugging Face model repository by AI agents built by OpenAI. Sam Altman and Elon Musk backed Amodei's stance. That commentary weighed on chip stocks Monday but boosted cybersecurity shares instead.
Analysts see durable security demand
Evercore ISI analyst Kirk Materne said enterprises will keep needing protection regardless of how fast AI agents roll out, since "those agents will still need to be secured, governed and observed". He named Okta, SailPoint, Palo Alto Networks and CrowdStrike as beneficiaries of rising identity-security spending, and said Palo Alto Networks and CrowdStrike remain best positioned to capture growing cybersecurity budgets given their integrated security-stack offerings.
Jefferies analyst Joseph Gallo said momentum for agentic AI security is still early, expecting initial signals this year and likely material contribution starting in 2027. D.A. Davidson's Gil Luria agreed cybersecurity risks are real but said companies should respond by hardening code bases rather than slowing AI development, naming Microsoft, Amazon.com and Google as candidates to lead that effort.
Source: MarketWatch
Trading involves risk.
Risk Disclaimer
