Why cybersecurity stocks are getting another big boost. They're key to the AI trade

Cybersecurity stocks jumped Wednesday as top U.S. security agencies warned threats to the internet amid powerful advancements in artificial intelligence capabilities. Amplify Cybersecurity ETF (HACK) gained 3.2%, First Trust NASDAQ Cybersecurity ETF (CIBR) added 2.7%, Palo Alto Networks rose 7%, CrowdStrike advanced 5.2% and Zscaler climbed 7.8%. Analysts are thinking cybersecurity stocks could be a solid long-term play for the technolgy sector even as fears mount the 2027 outlook. "While 2027 setups [are] tricky, [we] see tactical longs in the group," Meta Marshall at Morgan Stanley said in a Thursday note to clients, mentioning the programming language vulnerability that the U.S. National Security Agency and Federal Bureau of Investigation posted on Wednesday. Marshall is "tactically more [positive on] FTNT , QLYS ; balanced TENB ; more reserved CHKP , RPD ." Morgan Stanley has an overweight rating on Palo Alto Networks, with a $410 price target, implying 18% upside from Wednesday's close of $347.25. "Palo Alto Networks offers a disruptive platform, well positioned to address the evolving threat landscape and consolidate a fragmented security market," Marshall said. PANW 5D mountain PANW 5 day The Wednesday security warnings focused on risks to PHP, the programming language used to build large swaths of the internet, including WordPress, Drupal and Magneto websites that support different publishing and e-commerce platforms. Security agencies recommended making immediate fixes to the code and going offline entirely if fixes couldn't be made. "If an immediate update is not feasible, it is [recommended] that organizations take the system offline until it can be fully mitigated," the NSA said. The technological advice and subsequent stock moves come as concerns rapidly developing artificial intelligence capabilities swirl in cybersecurity. Investors think cybersecurity will become more important as AI develops. "All these companies like CrowdStrike and Palo Alto Networks — they should be a beneficiary, a clear beneficiary from continued AI development," Paul Meeks, head of technology research at Freedom Capital Markets, told CNBC. OpenAI dropped hundreds of math proofs earlier this month in a move that has left the mathematics community reeling. Anthropic made explicit forays into cryptography over the summer. One mathematics expert told CNBC that the advancements have real security implications. The Association for Human Mathematics, an academic group , said OpenAI's latest mathematical release was more power than science. "Releasing over 700 files at once is not a demonstration of scholarship, but a demonstration of power. We urge mathematicians to discontinue their work with OpenAI and to return to a vision of science that centers human understanding," the group said .

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