J.P. Morgan’s Brian Essex on Why Valuations Drop as Fundamentals Hold Steady
Investor anxiety over artificial intelligence’s long-term impact is dragging down cybersecurity stock valuations despite steady growth and profitability.
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Public cybersecurity companies have largely met or exceeded expectations in 2026, but their stock prices continue to fall as markets question whether current business models will remain viable in an AI-driven future. While revenue growth and profitability have remained relatively stable – and in some cases even outperformed expectations – investors are increasingly focused on long-term valuation assumptions, particularly the durability of these companies’ business models, said Brian Essex, executive director of U.S. software equity research at J.P. Morgan.
“It’s not about disruption this year or even 14 to 18 months from now – it’s all about whether, longer term, these business models will still be viable given the disruption we’re seeing,” Essex said.
In this video interview with Information Security Media Group at RSAC Conference 2026, Essex also discussed:
- How generative AI is accelerating innovation while raising investor concerns about sustainability;
- Why established platform vendors are better positioned than smaller players to adapt to AI disruption;
- How AI-driven threats and expanding attack surfaces are increasing demand for cybersecurity tools.
Essex is an equity research leader covering enterprise and security software since 2004 across buy- and sell-side roles. He joined J.P. Morgan in 2022 after working at Goldman Sachs, Morgan Stanley and Invesco, bringing two decades of industry and market insight.
