Cybersecurity Stocks: Earnings Show AI is Driving Demand

The narrative around cybersecurity stocks has shifted dramatically in recent weeks. Whereas earlier in the year these stocks were seen as vulnerable to AI disruption, they are now being viewed as AI beneficiaries.

Earnings are reinforcing this new narrative. Here’s a look at some highlights from recent quarterly earnings reports across the sector.

Palo Alto Networks: 60% Growth in Next-Gen Security ARR in Q3

Palo Alto Networks’ fiscal Q3 earnings¹, posted on June 2, were strong. For the quarter, total revenue was up 31% year-over-year to $3.0 billion (including $388 million from CyberArk and Chronosphere). Meanwhile, Next-Generation Security ARR revenue was up 60% year-over-year to $8.1 billion (including $1.6 billion in NGS ARR from CyberArk and Chronosphere). On the back of this performance, the company raised its guidance for the full year.

In an earnings presentation, Palo Alto stressed that AI is creating higher demand for cybersecurity. Its view is that the latest frontier models, such as Anthropic’s Mythos, are a “game-changer” for the industry because they can find and exploit vulnerabilities at an unprecedented speed and scale. It also said that its platformization model – which integrates a range of cybersecurity solutions into a unified, scalable platform – is adding value for customers. Note that in Q3, it won a $200 million ARR platformization deal with a “leading Frontier AI lab” for observability across compute environments.

Fortinet: Product Revenue Up 41% in Q1

Fortinet is another cybersecurity company that has raised its full-year guidance recently. Its Q1 earnings², posted on May 6, showed year-over-year revenue growth of 20% with product revenue up 41%. Billings grew 31% to $2.09 billion. As a result of this strong performance, the company now expects full-year revenue to rise 15% year-over-year.

In the earnings release, management said that growth was driven by an increasingly complex threat environment that is being intensified by AI. It noted that it is collaborating with multiple AI companies – including Anthropic as part of Project Glasswing – to help combat AI-based cybercrime. It also highlighted its range of AI-powered solutions in a presentation. Currently, AI is powering more than 20 solutions, leading to faster, smarter operations.

CrowdStrike: Expecting 27.7% ARR Growth This Year

Finally, turning to CrowdStrike, it delivered revenue of $1.39 billion in its fiscal Q13, a 26% increase year-over-year. ARR came in at $5.51 billion, up 24% year-over-year. As a result of this strong performance, the company raised its FY2027 net new ARR growth guidance by 520 basis points at the midpoint. It now expects 27.7% growth in net new ARR for the fiscal year.

In the earnings release, CrowdStrike CEO George Kurtz said that the worlds of AI and cybersecurity are colliding, creating an “inflection point” for the group. He noted that as a result of the AI threat, the company is seeing platform adoption from existing customers, new logo lands, and increased partner engagement. The earnings release also highlighted CrowdStrike’s partnerships with Anthropic (Project Glasswing) and Open AI (Trusted Access for Cyber). It is the only company to be selected as a launch partner in both programs.

Cybersecurity Stocks Are Back

Ultimately, recent earnings reports make it clear that AI is not a disruptive threat to the cybersecurity sector, but instead a major growth engine. As complex, AI-driven cyber threats escalate, these platform vendors are proving to be indispensable security infrastructure for the future.

Those seeking exposure to this area of technology may wish to explore the Themes Cybersecurity ETF (SPAM). This provides access to over 30 companies in the cybersecurity space.

Footnotes:

¹Palo Alto, Palo Alto Networks Reports Fiscal Third Quarter 2026 Financial Results, as of June 2, 2026

²Fortinet, Fortinet Reports Strong First Quarter 2026 Financial Results, as of May 6, 2026

³CrowdStrike, CrowdStrike Reports First Quarter Fiscal Year 2027 Financial Results, as of June 3, 2026