Cybersecurity's comeback trade

Anthropic employees might have a future in poetry: The company’s new initiative, dubbed Project Glasswing, is named after a nearly invisible butterfly, and is all about catching the “bugs” you don’t see coming.

Launched yesterday, the program brings together a select group of companies to test Claude’s new Mythos model, a cybersecurity-focused system designed to hunt down hidden vulnerabilities in critical software. Mythos Preview has already uncovered thousands of high-severity issues, spanning every major operating system and web browser—and raising some eyebrows in the security community.

The AI cyber-alliance

At first glance, that kind of competition sounds like bad news for cybersecurity firms, which have already been under pressure from AI disruption fears—first sparked when Anthropic rolled out a code-scanning tool in February. The Global X Cybersecurity ETF is down 15.54% in 2026, compared to just a 0.92% decline for the S&P 500 Index.

But instead of replacing them, AI firms are teaming up with cybersecurity OGs: In addition to companies like Amazon, Google, Apple, and Nvidia, Anthropic is partnering with CrowdStrike and Palo Alto Networks as part of the Glasswing initiative. Shares of both are up 9.25% and 8.4%, respectively, over the last five days.

AI goes from a threat to tailwind

Analysts seem to be supporting the bull case as they upgrade cybersecurity stocks: Arete Research upgraded Palo Alto Networks to Buy from Sell last month, while CrowdStrike has picked up multiple upgrades from firms like Piper Sandler and Wolfe Research.

The reason is that as AI models get more powerful, they’re also making attacks more sophisticated and expanding the number of potential vulnerabilities. Hackers have already used AI tools to breach hundreds of firewalls globally, including government systems—highlighting how the same technology driving disruption is also increasing demand for protection.

The downside is that cybersecurity stocks are not cheap: CrowdStrike trades at more than 78x forward earnings—the ninth most expensive name in the S&P 500—while Palo Alto Networks sits around 42x.

But if Anthropic’s move signals anything, it’s that AI companies are leaning toward partnership, not disruption—giving investors a reason to believe the growth story may still justify the price.—SY