Key Takeaways
- Cybersecurity is emerging as the software sector where AI acts as a growth catalyst rather than a threat, making spending on security non‑negotiable.
- Project Glasswing, a coalition of major tech and financial firms (AWS, Apple, Google, Microsoft, Nvidia, JPMorgan, etc.), aims to remediate critical AI‑detected vulnerabilities before malicious actors can exploit them.
- Fortinet (FTNT) has broken out of a long descending channel after strong Q1 2026 earnings, with revenue up 20% YoY and EPS up 41%; the stock is now trading above its 200‑day moving average but appears overbought (RSI ≈ 85).
- Palo Alto Networks (PANW) is pursuing a “platformization” strategy, boasting 1,550 fully‑platform customers, 33% subscription‑business growth, and a target of $20 bn in subscription revenue by 2030; the stock has risen 71% in the last 57 trading days and sits above both moving averages (RSI ≈ 86).
- CrowdStrike (CRWD) leverages a shared‑intelligence AI model that improves with each customer’s data; revenue is up 23% YoY, recurring revenue exceeds $5.25 bn, and Falcon Flex subscriptions grew 120% YoY; the stock recently hit a new all‑time high near $607 (RSI ≈ 83).
- All three names show strong momentum after multi‑month bases, but their elevated RSI readings suggest a period of price consolidation may be prudent before adding new positions.
- Investors should use key technical levels—$100‑$105 for FTNT, $215 for PANW, and $540‑$550 for CRWD—as potential support zones on pullbacks, while longer‑term stops can be placed near the 200‑day or 50‑day moving averages.
Introduction
This is The Best Stocks in the Market, brought to you by Josh Brown and Sean Russo of Ritholtz Wealth Management. The discussion below distills their recent commentary on why cybersecurity stands out as a prime beneficiary of the AI revolution, highlights the collaborative Project Glasswing initiative, and provides an in‑depth look at three leading names—Fortinet, Palo Alto Networks, and CrowdStrike—covering fundamentals, recent performance, and technical outlook.
Why Cybersecurity Thrives in the AI Era
Unlike many software groups that view AI as a potential disruptor, cybersecurity sees artificial intelligence as a powerful growth driver. Security spending is essentially non‑negotiable for corporations; as threats become more sophisticated, budgets must expand. Moreover, the better AI becomes at detecting and predicting attacks, the more valuable—and less replaceable—established security platforms grow. This dynamic separates cybersecurity leaders from peers such as Salesforce or Atlassian, where AI could erode existing business models.
Project Glasswing: Industry‑Wide AI‑Security Collaboration
When Anthropic’s Mythos model uncovered hundreds of critical security flaws across major enterprises, the company launched Project Glasswing to address the issue before bad actors could weaponize newer AI tools. The initiative brings together systemically important players—including Amazon Web Services, Apple, Broadcom, Cisco, CrowdStrike, Google, JPMorgan Chase, the Linux Foundation, Microsoft, Nvidia, and Palo Alto Networks—to share intelligence, develop patches, and harden defenses collectively. The partnership underscores the sector’s recognition that tackling AI‑related risk requires a coordinated, industry‑wide effort rather than isolated vendor solutions.
Fortinet (FTNT): Company Overview
Fortinet provides the digital “locks and walls” that protect corporate networks, selling both hardware appliances and ongoing software subscriptions that keep defenses current. Positioned as a one‑stop shop for network security, FTNT competes directly with Palo Alto Networks. The company endured a rough stretch in 2025, slipping into a 32% drawdown as large enterprises delayed purchases awaiting refreshed offerings. However, the release of Claude (Anthropic’s AI model) acted as a catalyst, prompting a strong earnings beat that sent the stock above its prior range.
Fortinet (FTNT): Recent Performance & Technicals
In Q1 2026, FTNT reported 20% year‑over‑year revenue growth and a 41% increase in EPS, with its cybersecurity networking segment (66% of billings) up 32% and AI‑driven security operations up 23%. The firm returned $820 million via share repurchases and paid down $500 million of debt. Technically, the stock had languished in a descending channel for roughly 18 months, making lower highs from the upper $90s. After compressing into the $83‑$88 range and finding buyers at the rising channel floor, the May 6 earnings print triggered a breakout. FTNT now trades near $124, sitting above both its 50‑day and 200‑day moving averages for the first time in a year and a half. The RSI sits around 85, indicating overbought conditions; a period of consolidation or a flag pattern would be healthy before the next leg up. Key support lies at the former channel top ($100‑$105), while the 200‑day at $83 serves as a longer‑term reference.
Palo Alto Networks (PANW): Company Overview
Palo Alto Networks aims to be the “Amazon of cyber,” offering an integrated platform that replaces the need for customers to purchase ten different security tools from ten vendors. Its platformization strategy has yielded 1,550 customers fully on the platform, who now spend 19% more year over year. The subscription business is growing at 33%, with AI‑powered security operations and cloud security suites each surpassing $500 million in recurring revenue. Recent acquisitions—CyberArk (identity security) and Chronosphere (cloud monitoring)—fill gaps in the portfolio, and management targets $20 billion in subscription revenue by 2030.
Palo Alto Networks (PANW): Recent Performance & Technicals
After bottoming alongside CrowdStrike in late February, PANW has rallied 71% over the subsequent 57 trading days, marking the second‑best 57‑day stretch in its history (behind only the Covid‑era bounce). The stock carved a long, choppy base from the mid‑$130s through resistance in the $180‑$190 range before breaking above $190 with conviction, triggering an accelerated move. PANW now trades around $245, comfortably above both its 50‑day and 200‑day moving averages. The RSI reads approximately 86, reflecting a strong trend off a completed base rather than a short‑term squeeze. Traders watch the gap zone in the low $200s as a first re‑entry point; $215 (the 10‑day) can serve as a tighter line for risk‑averse investors. A stop near the bottom of the gap ($190) would protect against a reversal that would signal a breakdown of the bullish structure.
CrowdStrike (CRWD): Company Overview
CrowdStrike secures endpoints—laptops, servers, and cloud workloads—using AI, with a unique network effect: each customer’s threat data feeds a shared intelligence platform that makes the entire solution smarter over time. The company’s Falcon Flex subscription model, which lets customers bundle and unlock tools as needed, has grown 120% year over year. Over half of CRWD’s customers now use six or more products, up from just a few a few years ago. Recurring revenue has surpassed $5.25 billion, and revenue is up 23% YoY. The firm is slated to report earnings in early June, with expectations of 24% top‑line growth, 54% EBIT growth, and 46% EPS growth.
CrowdStrike (CRWD): Recent Performance & Technicals
CrowdStrike endured a steep correction, falling from a peak near $570 to the low $300s before establishing a classic accumulation base characterized by higher lows and repeated tests of the $400‑$420 zone. The 50‑day moving average eventually turned up and crossed back through the 200‑day while price coiled, setting the stage for a decisive breakout. CRWD now trades at approximately $607, surpassing prior all‑time highs. The RSI stands around 83, indicating robust momentum off a long base rather than a speculative blow‑off. Traders monitor the $540‑$550 region—the breakout origin—as the likely zone for demand to re‑emerge on any pullback. For risk management, many investors use the 50‑day at roughly $446 as an anchor; a close below that level would alter the bullish picture. The volume pattern through the base and into the breakout supports the view that the move reflects genuine institutional rotation rather than a fleeting speculative rally.
Conclusion & Disclaimer
Fortinet, Palo Alto Networks, and CrowdStrike each illustrate how cybersecurity firms are leveraging AI to fortify their growth trajectories, backed by strong fundamentals and compelling technical breakouts. While the momentum is impressive, the elevated RSI readings suggest that a period of price digestion may be wise before adding new exposure. Investors should consider the outlined support zones and moving‑average references when structuring entries and stops, always aligning decisions with individual risk tolerance and investment horizons.
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