Key Takeaways
- Palo Alto Networks and CrowdStrike led cybersecurity stocks lower Friday following a report Anthropic is testing new AI models that could disrupt the industry.
- Many cybersecurity stocks have had a tough start to the year amid worries about the impact of developments in AI.
Cybersecurity stocks took a hit Friday, deepening the sector’s recent slump on AI fears.
Shares of Palo Alto Networks (PANW) and CrowdStrike (CRWD) dropped close to 6% to rank among the biggest decliners in the S&P 500 Friday, following a report that Anthropic is testing new AI models that could disrupt the industry. Other cybersecurity stocks also lost ground, with Zscaler (ZS) and SentinelOne (S) losing around 6%. (For more from Investopedia on today’s market moves, click here.)
Anthropic has been testing new models that scored higher on coding and cybersecurity-related tasks than current offerings, Fortune reported Thursday. The report raised some concerns about growing competition in the cybersecurity space, along with worries about AI-related risks. Anthropic did not respond to an Investopedia request for comment in time for publication.
Why This Matters to Investors
Friday’s tumble suggests another blow to investor confidence in cybersecurity stocks, amid broader uncertainty about the impact of AI.
For many of America’s biggest cybersecurity stocks, Friday’s slide added to losses since the start of the year amid a broader pullback in software as new AI releases rattled support for the sector. Last month, software stocks plummeted in the days after Anthropic released tools that added fuel to concerns about AI-driven disruption.
With Friday’s drop, shares of Crowdstrike and Palo Alto Network have lost roughly a fifth of their value in 2026 so far. Sentinel’s stock has dropped about 16%, while Zscaler has lost more than 40% year-to-date.