Shares of cybersecurity software companies tumbled Friday after Anthropic PBC introduced a new security feature into its Claude AI model.
Crowdstrike Holdings was among the biggest decliners, falling 8%, while Cloudflare Inc. slumped 8.1%. Meanwhile, Zscaler dropped 5.5%, SailPoint shed 9.4%, and Okta Inc. declined 9.2%. The Global X Cybersecurity ETF fell 4.9% and closed at its lowest since November 2023.
Anthropic said the new tool “scans codebases for security vulnerabilities and suggests targeted software patches for human review.” The firm said the update is available in a limited research preview for now.
The drop by cybersecurity stocks was the latest example of software shares slumping on concerns over competition from AI-native companies. Anxiety has been building for weeks. The iShares Expanded Tech-Software Sector ETF is down more than 23% this year, on track for its biggest quarterly percentage drop since the financial crisis in 2008.
“There’s been steady selling in software, and today it’s security that’s getting a mini-flash crash on a headline,” said Dennis Dick, head trader at Triple D Trading. “This kind of market is scary for investors, because things are just moving relentlessly to the downside as soon as you get a hint of disruption. It’s rational to be cautious, because people were saying a while ago that the software drop was overdone, and yet it keeps going down.”
Much of the selling has come on new AI tools released by companies like Anthropic, OpenAI, and Alphabet Inc. Investors are fretting that the ability to “vibe code” — use AI to write software code — will allow users to create their own applications, diminishing demand for legacy products, weighing on companies’ growth, margins, and pricing power.
The volatility in the group shows how companies can be labeled as potential AI losers. Cloudflare has been seen as a proxy for Anthropic’s rise to prominence; it soared in late January amid reports of rising adoption of an open-sourced AI assistant that works with Anthropic’s Claude.
Jefferies analyst Joseph Gallo expects cybersecurity will ultimately be a net winner from AI, but “headline headwinds are likely to intensify before clarity & cyber inflection from securing AI materializes.”
The broader implications of Anthropic’s announcement, he added, are that AI providers “will announce more products & compete for incremental cyber budget dollars.”
Source: Bloomberg
