CrowdStrike, Datadog and other cybersecurity stocks slide after Anthropic’s AI tool launch

Chelsie Wyatt

Feb 23 (Reuters) – Shares of cybersecurity companies including CrowdStrike (CRWD.O), opens new tab and Datadog (DDOG.O), opens new tab slumped on Monday, as investors weighed the potential impact of artificial intelligence startup Anthropic’s new security tool on the industry.
Anthropic’s new feature, Claude Code Security, is designed to detect high-severity vulnerabilities in open-source software repositories and offer patches to fix bugs.

Shares of CrowdStrike, Datadog and Zscaler (ZS.O), opens new tab fell around 11%, while those of Fortinet (FTNT.O), opens new tab and Okta (OKTA.O), opens new tab were down roughly 6%. Palo Alto Networks (PANW.O), opens new tab dropped 3% and SentinelOne (S.N), opens new tab was down by 5%.

Software stocks have been battered in recent months by market fears around the growing capabilities of AI tools, particularly following the launch of plug-ins from Anthropic’s large language model Claude, seen as the startup’s push to become an application layer.

“What you’re seeing today is really the continuation of a panic-driven, narrative-led selloff,” said Shrenik Kothari, director, security and infrastructure analyst at Robert W. Baird.
Claude Code Security does not handle real-time security tasks such as detecting live intrusions, stopping attacks in progress or managing compiled software components in production, which are capabilities provided by other specialized security platforms, said Kothari.
Source: Reuters