Anthropic's Mythos AI Drives Cybersecurity Stock Rally as IBM Notes Contract Delays

A Surge in Cyber Stocks

Tuesday was a day of significant gains for cybersecurity stocks. CrowdStrike jumped 12%, while Okta and Netskope each climbed approximately 11%. Gains of about 7% were recorded for Palo Alto Networks, Zscaler, SentinelOne, and SailPoint.

The trigger came from comments about technology spending. IBM CEO Arvind Krishna told CNBC's Sara Eisen that the arrival of a new AI model called Mythos, built by the company Anthropic, is rattling corporate buyers. The emergence of new AI systems like Anthropic's Mythos has generated significant unease on Wall Street, as fears grow over accelerated and more advanced cyber threats.

The Reason Behind the Pause

Krishna laid it out plainly. "Mythos is making people pause to say, wait, how much do I need to spend on cyber? They're pausing on new deals until they know," Krishna told CNBC's Sara Eisen on Tuesday.

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That pause is already showing up in the numbers. In IBM's preliminary second-quarter results, Krishna noted that clients redirected purchases toward servers and memory, and that "rapidly-evolving, industry-wide cybersecurity concerns" distracted customers. A number of large contracts were postponed in the final weeks of the quarter as enterprises reconsidered their budgets.

Krishna added that IBM does not see its software being disrupted by AI at all. "We don't see our software being disrupted by AI at all," he said.

The Broader Spending Shift

IBM's preliminary results also highlighted a notable reallocation of IT budgets. Krishna noted that client expenditure moved toward servers and memory, while "rapidly-evolving, industry-wide cybersecurity concerns" drew attention away from other areas. This shift comes at the expense of new cybersecurity software contracts, which are being deferred until organizations can reassess their threat landscape.

The temporary pause, however, does not signal a reduction in overall security investment; rather, it reflects a strategic recalibration. Investors appear to view the hesitation as a prelude to a wave of spending once companies finalize their strategies, which helps explain why cybersecurity stocks rallied sharply on Tuesday.

What This Means for the Sector

The pause in deals reflects a broader recalibration as businesses confront the implications of rapidly advancing AI. Mythos, a large language model developed by Anthropic, can generate convincing text and code, raising the stakes for cybersecurity defenses. Attackers could use such tools to automate phishing, craft more believable social engineering attacks, or probe networks at machine speed. In response, corporate buyers are reassessing their security budgets before signing new contracts, even as they increase spending on foundational infrastructure like servers and memory.

Cybersecurity vendors, however, are seen as long-term beneficiaries. The same threats that cause short-term delays are expected to drive higher demand for protection, which helps explain why stocks like CrowdStrike, Okta, and Netskope rallied sharply on Tuesday.

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