Cybersecurity Stocks Retreat From Record Highs — Citi Raises CRWD, PANW, ZS Targets On Improving Spending Momentum

• Citi analyst Fatima Boolani said AI deployments are driving additional security investment.
• Citi raised its Okta price target to $215 from $205 but kept its ‘Neutral’ rating.
• Wells Fargo raised its FTNT price target to $160 from $135 but maintained an ‘Underweight’ rating

Cybersecurity stocks are facing a market disconnect. On one hand, you have share prices pulling back from recent highs, but analysts see signs that enterprise spending is gaining momentum. 

On Thursday, Citi raised its targets on CrowdStrike (CRWD), Palo Alto Networks (PANW) and Zscaler (ZS), while Wells Fargo said channel checks pointed to improving demand heading into 2027. 

CRWD stock and PANW have fallen more than 13% from their Oct. 6 record closes, while Fortinet has retreated from its Oct. 13 peak. ZS and OKTA remain well below their 2021 peaks, down 41% and nearly 28%, respectively.

The latest declines came amid a broader technology selloff and renewed concerns about competition. Cybersecurity stocks also came under pressure following reports that OpenAI was in early talks to acquire security startup Trail of Bits.

Analysts Bullish On Cybersecurity

Despite the pullback, Citi struck a constructive tone on cybersecurity spending, citing encouraging findings from its latest chief information officer survey.

According to The Fly, Citi analyst Fatima Boolani said cybersecurity spending trends have improved, with artificial intelligence (AI) deployments helping drive additional investment in security.

The brokerage raised its CrowdStrike, Palo Alto Networks and Zscaler stock price targets, maintaining ‘Buy’ ratings on all three. The brokerage also raised its target price for OKTA stock, but kept the rating unchanged at ‘Neutral’.

Wells Fargo also pointed to improving cybersecurity demand, with analyst Richard Poland raising FTNT stock price target to $160 from $135 while maintaining an Underweight rating, according to The Fly.

Despite the target increase, Wells Fargo’s revised valuation implies approximately 13% downside from Fortinet’s Wednesday closing price of $184.05.

Why AI Security Remains In Focus

The analyst commentary comes as businesses face growing security risks from AI adoption. Earlier this month, CrowdStrike reported that hackers used AI-powered tools to target South Korean financial institutions and steal data. 

Anthropic also disclosed incidents in which its AI models gained unauthorized access to real-world systems during cybersecurity testing. Google DeepMind CEO Demis Hassabis described such incidents as “early warning shots”, highlighting the growing security risks accompanying wider AI adoption.

In its 2026 State of Critical Infrastructure Cybersecurity Report, Palo Alto Networks found that 95% of surveyed security leaders were concerned about attacks powered by advanced AI models. The survey covered more than 1,600 leaders across 11 countries.

What Retail Thinks About Cybersecurity Stocks

Retail investors’ sentiment across cybersecurity stocks remained largely bearish on Stocktwits. Palo Alto Networks, Zscaler, Okta and Fortinet all registered ‘bearish’ sentiment, while sentiment around CrowdStrike remained ‘neutral’.

Despite the recent pullback, four of the five cybersecurity stocks have more than doubled in value this year. OKTA stock leads with a 145% year-to-date gain, followed by FTNT at 132%, CRWD at 113% and PANW stock at 104%. 

However, ZS stock has bucked the trend, declining 1.84% so far this year. By comparison, the First Trust NASDAQ Cybersecurity ETF (CIBR), which holds these stocks, has risen 47% during this period.