Observed Signal · May 18, 2026 · Earnings Report · Source: CNBC Investing · Impact: 4/5 · Sentiment: Positive
Cybersecurity Stocks Rally; Three Picks from Josh Brown
Published May 18, 2026, CNBC’s Josh Brown and Sean Russo highlight a strong rally in large cybersecurity stocks and profile Fortinet, Palo Alto Networks and CrowdStrike. Fortinet reported a robust Q1 with double-digit revenue and EPS growth and significant buybacks and debt reduction. Palo Alto is expanding its platform, reporting strong subscription growth, notable recurring revenue in AI and cloud security, and recent acquisitions. CrowdStrike’s recurring revenue and product adoption remain high, with Falcon Flex expanding rapidly and upbeat expectations ahead of its early-June earnings. The piece frames cybersecurity as a durable, non-negotiable IT spend that benefits from AI-driven threat dynamics and cites Anthropic’s Project Glasswing as an industry collaboration addressing AI-discovered security flaws.
Earnings beats and strong subscription metrics from major cybersecurity SaaS vendors signal durable corporate security spending and validate AI as a growth catalyst—material for enterprise software investors and technology budgets.
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Key Takeaways & Evidence Grounding
- Published on 2026-05-18.
- Fortinet, Inc. (FTNT) reported Q1 results with revenue up 20% year-over-year and EPS up 41% year-over-year; the company repurchased $820 million of stock and paid $500 million of debt.
- Palo Alto Networks, Inc. (PANW) has 1,550 customers fully on its platform; subscription business growing 33% year-over-year; its AI security operations and cloud security suites each surpassed $500M+ in recurring revenue; recent acquisitions include CyberArk and Chronosphere.
- CrowdStrike Holdings, Inc. (CRWD) revenue up 23% year-over-year, crossed $5.25 billion in recurring revenue; its Falcon Flex subscription grew 120% year-over-year; analysts expect ~24% revenue growth and ~46% EPS growth year-over-year for its early-June earnings.
- Anthropic announced Project Glasswing to address AI-discovered security flaws; named partners include Amazon Web Services, Anthropic, Apple, Broadcom, Cisco, CrowdStrike, Google, JPMorgan Chase, the Linux Foundation, Microsoft, Nvidia and Palo Alto Networks.
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Cramer: Two cybersecurity stocks can keep climbing
CNBC’s Jim Cramer said investors should not be deterred by recent rallies in cybersecurity stocks, arguing that AI-driven threats are increasing demand for security products. He highlighted CrowdStrike and Palo Alto Networks — which have risen sharply year-to-date — and noted that earnings growth justifies higher P/Es. Cramer cited bullish research from TD Cowen, which raised price targets on both companies and kept buy ratings, and said AI developers alone won’t eliminate the need for specialist cybersecurity providers. He emphasized cloud migration and CrowdStrike’s cloud-native positioning, noting the company’s business is about 15% penetrated and still has substantial runway for growth. Cramer’s Charitable Trust owns shares in both CrowdStrike and Palo Alto Networks.
Wall Street: AI Boosts Cybersecurity Stocks
Wall Street analysts are reframing AI as a tailwind for cybersecurity companies, citing increased demand for security as AI systems expand attack surfaces. Mizuho upgraded CrowdStrike to outperform and raised its price target to $520, citing healthy platform demand and strong AI security offerings. JPMorgan identified CrowdStrike and Palo Alto Networks as likely beneficiaries of threats tied to foundation models and agentic AI. The article notes partnerships such as Anthropic’s Project Glasswing (which named CrowdStrike and Palo Alto as partners) and highlights product and sales catalysts like CrowdStrike’s Falcon Flex and hyperscaler demand. Jim Cramer and his Investing Club hold both names (CrowdStrike rated strongly; Palo Alto rated a 3 to trim into strength). Stock moves and ETF exposures (IGV software ETF) suggest investor sentiment is shifting toward viewing AI as increasing security spend rather than stealing market share.
CrowdStrike, Palo Alto Stocks Rally After Black Hat AI Threat
Cybersecurity stocks CrowdStrike and Palo Alto Networks reached record highs after discussions at the Black Hat conference in Las Vegas highlighted a rising threat from AI agents. Analysts at BTIG said AI agents have “fundamentally changed the threat landscape,” and the firm raised price targets on Palo Alto to $380 and CrowdStrike to $237 while also boosting Rubrik. The article notes businesses are increasingly adopting AI-driven security tools to counter more sophisticated attacks. Other cybersecurity names including Tenable, Rubrik, Netskope and Zscaler also rallied. Market commentary from Cantor and Jefferies emphasized that AI has shifted from a feature to a core pillar of attacker and defender infrastructure, driving renewed investor interest in security vendors.
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