Sudden Black Swan: Entire Market Crashes! One Industry Gone in a Day — This Time It's Cybersecurity

Hello everyone, let’s pay attention to the renewed panic caused by AI. Anthropic has launched Claude security tools, leading to a broad decline in cybersecurity stocks.

Last night in the U.S. stock market, shares of cybersecurity software companies collectively plummeted. Crowdstrike Holdings was one of the biggest losers, down about 8%, while Cloudflare dropped approximately 8.1%. Meanwhile, Zscaler fell about 5.5%, SailPoint declined around 9.4%, and Okta dropped roughly 9.2%. The Global X Cybersecurity ETF fell about 4.9%, closing at its lowest level since November 2023.

On the news front, AI company Anthropic PBC introduced a new security feature in its Claude AI model.

Anthropic stated that this new tool can “scan code repositories for security vulnerabilities and recommend targeted software patches for manual review.” The company said that this update is currently in a limited research preview stage.

The decline in cybersecurity stocks is the latest example of the software sector weakening due to concerns over competition from AI-native companies. This anxiety has persisted for weeks; the iShares Expanded Tech Software Sector ETF has already fallen over 23 this year, potentially marking the largest quarterly decline since the 2008 financial crisis.

The launch of AI-assisted coding tools has intensified investor worries about traditional IT and cybersecurity companies. Analysts warn that automated AI solutions could disrupt existing software business models, compress profit margins, and force companies to innovate rapidly. The market is closely watching how AI will reshape cybersecurity.

Analysts say, “The software sector has been under continuous selling pressure, and the security sector experienced a small ‘flash crash’ due to a headline. This market behavior is frightening for investors because as soon as there’s a hint of disruption, stock prices ruthlessly decline. Staying cautious is rational, especially since not long ago some said software stocks were oversold, but they continued to fall.”

A large part of the sell-off stems from new AI tools released by companies like Anthropic, OpenAI, and Google. Investors are worried that “vibe code”—the ability to write software code using AI—will enable users to create their own applications, thereby weakening demand for traditional products and putting pressure on company growth, profit margins, and pricing power.

(Source: China Fund News)