Feb 23 (GeokHub) Shares of major cybersecurity companies fell sharply Monday as investors assessed the potential impact of a new artificial intelligence-driven security tool from Anthropic.
The decline followed the launch of Claude Code Security, a feature designed to identify high-severity vulnerabilities in open-source software repositories and generate patches to address identified flaws. The announcement fueled concerns that AI-powered automation could disrupt parts of the cybersecurity industry.
Among the hardest hit were CrowdStrike and Datadog, with shares dropping around 11%. Zscaler posted similar losses.
Other companies also saw declines. Fortinet and Okta fell roughly 6%, while Palo Alto Networks and SentinelOne recorded more moderate losses.
The broader selloff reflects ongoing market sensitivity to AI developments, particularly as large language models expand beyond conversational use cases into enterprise and application-layer tools.
Analysts Urge Caution
- Industry analysts suggested that investor reaction may be driven more by narrative than fundamentals. While Claude Code Security is designed to scan code repositories and flag vulnerabilities, it does not replace real-time threat detection systems, intrusion prevention tools or production-level security monitoring provided by established cybersecurity platforms.
Specialized firms continue to focus on stopping active cyberattacks, managing enterprise infrastructure and protecting live systems — capabilities that extend beyond automated code analysis.
Expanding AI’s Role in Security
The market reaction comes amid accelerating integration of AI across technology sectors. Earlier Monday, chip designer Nvidia announced partnerships with Akamai, Forescout, Palo Alto Networks, Xage Security and Siemens to enhance real-time cybersecurity for industrial control systems.
As AI capabilities expand into coding, automation and infrastructure management, investors are reassessing how traditional software and security providers may adapt.
For now, the latest stock movements highlight a recurring theme in 2026 markets: rapid AI innovation is reshaping expectations, often triggering sharp swings in sentiment before longer-term impacts become clear.
