AI is Expanding Attack Surface
Artificial intelligence is creating new attack surfaces across endpoints, identity, cloud, networks, and data, increasing the need for cybersecurity spending. Goldman Sachs, Morgan Stanley, and J.P. Morgan increasingly view AI as a driver of security investment. Goldman Sachs says security is shifting from an AI casualty to an AI beneficiary.
Security Spending Could Accelerate
Goldman Sachs sees a potential cybersecurity budget inflection as early as Q4 2026 or H1 2027. Morgan Stanley also highlights cybersecurity as already benefiting from the AI infrastructure buildout. Its higher-conviction exposures include PANW, CRWD, Microsoft, Cloudflare, and identity vendors as organizations strengthen protection around expanding AI deployments.
Endpoint Security Gains Momentum
CrowdStrike reached USD 5.84 billion in ARR, with net new ARR accelerating 51%, while Falcon Flex ARR exceeded USD 2.29 billion. SentinelOne remains smaller but is improving profitability while expanding Purple AI and its security-data platform. These developments reflect rising demand for endpoint protection as AI expands enterprise technology environments.
Palo Alto Networks and Fortinet
Palo Alto Networks reported USD 9.1 billion of Next-Generation Security ARR, up 63%, while XSIAM ARR reached roughly USD 700 million, increasing 70%. Fortinet continues combining firewall, SASE, SecOps, and OT security while maintaining unusually high margins, positioning both companies across multiple cybersecurity requirements emerging alongside AI infrastructure
Zero Trust and SASE
Zero Trust and SASE remain important areas within AI security infrastructure. Zscaler reached USD 3.77 billion ARR, while Cloudflare grew revenue 36% and is positioning its global edge network as infrastructure for securing AI-agent traffic. Netskope continues growing near 30%, although profitability remains a work in progress.
Identity Becomes an AI Security Opportunity
Identity is emerging as a new AI-security opportunity as companies move beyond protecting human users. Okta, SailPoint, CrowdStrike, Microsoft Entra, and Palo Alto Networks/CyberArk are expanding capabilities toward machine identities and autonomous AI agents. As AI systems become more independent, controlling access and permissions becomes increasingly important for enterprise security teams.
Cyber Resilience and Data Security
Cyber resilience and data security are gaining importance as AI systems access increasingly sensitive information. Rubrik grew subscription ARR 33%, while Varonis is benefiting from demand to control what sensitive data AI models and agents can access. These trends highlight cybersecurity’s expanding role in protecting AI infrastructure, data, and autonomous systems.
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