AI safety debate splits software trade as cybersecurity demand stays in focus.
- CRWD and PANW extended gains as investors weighed AI-driven cyber threats against slower frontier-model development.
- Cybersecurity executives have highlighted the need to modernize security infrastructure to defend against increasingly capable AI-driven attacks.
- Salesforce’s Dreamforce kicked off on Tuesday, with the CRM firm spotlighting AIforce, expanded Agentforce and deeper Claude integration.
Cybersecurity stocks CrowdStrike and Palo Alto Networks extended their gains on Tuesday, even as a broader group of software names gave back part of Monday’s rally.
CRWD climbed about 3.4%, while PANW rose 0.3%, keeping both names in focus after their sharp gains in the previous session. Meanwhile, Salesforce, Adobe and Intuit fell 1.5% to 3%.
CrowdStrike shares dropped 0.5% in overnight trading, while others remained broadly flat. The divergence follows a major rotation triggered by calls from AI leaders to slow the pace of frontier-model development.
Anthropic CEO Dario Amodei argued for “pacing” AI capabilities so safety measures can keep up, with OpenAI CEO Sam Altman also voicing support for greater caution. The comments initially pressured chipmakers while sending software and cybersecurity stocks higher on Monday.
But by Tuesday, the trade began to split, while cybersecurity names continued to attract buyers.
The emerging distinction reflects how investors are interpreting the AI slowdown debate: a slower pace of model development could reduce the near-term disruption threat to traditional software, but increasingly capable AI systems could simultaneously expand the cybersecurity threat landscape.
AI Boom Drives Demand For Cybersecurity
Evercore analysts said Tuesday that autonomous AI agents could make sophisticated cyberattacks more scalable, potentially increasing demand for security tools as AI capabilities advance.
Cybersecurity executives have argued that AI is expanding, not reducing, the need for security tools.
Palo Alto Networks CEO Nikesh Arora said last week that nearly $1 trillion of legacy cybersecurity infrastructure needs modernization because systems built seven to 10 years ago were not designed to handle AI-driven threats moving at machine speed.
CrowdStrike CEO George Kurtz has similarly warned that AI lets attackers discover and exploit vulnerabilities faster. Nvidia CEO Jensen Huang has also described cybersecurity as a major emerging AI application, arguing that AI can continuously identify vulnerabilities and defend against attacks.
CRWD Catalyst
Roxanne Austin, a director at CrowdStrike, sold nearly $12 million worth of company shares, or 50,000 in total, earlier this week, according to an exchange filing on Tuesday.
Austin holds 77,040 shares of CrowdStrike following the transaction.
Salesforce’s Dreamforce Announcements
On Tuesday, Salesforce kicked off its Dreamforce event. The Mark Benioff-led firm unveiled AIforce, a new interface that brings Salesforce data, workflows and AI agents together, while expanding Agentforce across enterprise functions.
Salesforce also highlighted ClaudeForce, its deeper integration with Anthropic’s Claude, and introduced Koa, an AI model built using Nvidia’s Nemotron technology and trained on Salesforce’s CRM data.
Retail View On Software Stocks
On Stocktwits, retail sentiment remained ‘neutral’ for both CRWD and PANW, even as traders debated the future of cybersecurity tools as AI systems gain cyber capabilities and Big Tech firms increasingly develop their own security defenses.
The sentiment was ‘bearish’ for CRM and INTU and ‘extremely bullish’ for ADBE.
For updates and corrections, email newsroom[at]stocktwits[dot]com.
Read about our editorial guidelines and ethics policy
