How AI is changing the cybersecurity landscape

As the AI race shows no signs of slowing, TD Cowen Senior Analyst Shaul Eyal joins Market Domination to discuss how the technology is changing the face of the cybersecurity industry.

"We have begun to see a little bit of an impact as it relates to cybersecurity stocks, specifically in the security operation centers... Companies coming out with specific tailored gen. AI solutions. I would imagine as we start looking into [2026] and beyond, we should be able to see initial impact on cybersecurity stocks," Eyal explains. He notes that hackers are becoming much "much more advanced" and companies will "need to respond with AI-related solutions."

For more expert insight and the latest market action, click here to watch this full episode of Market Domination.

This post was written by Melanie Riehl

Video Transcript

Show 11 trend we talk about on this show a lot.

No surprises.

A I we have the face of A I and video reporting tomorrow after the close.

I'm just interested how A I has or is going to upend, redefine your coverage universe show.

Uh Definitely we have begun to see a little bit of an impact as it relates to cybersecurity stocks specifically in the security operation centers in socks.

Um It, it, it hasn't been moving the needle yet to be perfectly honest.

But as we start thinking about 2025 and 2026 and companies are companies coming out with a specific tailored gen A I solutions.

I would imagine as we start looking into 26 and beyond, we should be able to see initial gen A I impact on cybersecurity stocks.

The hackers are becoming much more advanced in that respect and the companies under coverage also need to respond with GA I related solutions.

So not a matter of if but when, so one of the names uh within your coverage real quickly that we haven't really seen gain too much traction here this year is Palo Alto networks and I bring that up because year to date the stocks only up just about 19% when it comes to what you need to see in order to or what maybe the street is looking for in order to regain that confidence in order to win back some of that lost momentum.

What's the issue?

So I, I think uh a couple of the issues having at play here, uh their entire platform organization strategy that has been playing out uh um slightly more from in a mixed perspective over the course of the past few quarters, actually, the quarter that they just reported, um I think alleviated many of the fears.

We had continued to see how they're uh continue kind of to gain traction with their existing customers when we think about that platform strategy.

Uh So stock has reacted well, actually over the course of the past few weeks, I would imagine, um as we start looking into 25 and 26 if they can, you know, sustain this rule of above rule of 40 um characteristics in terms of above 15% revenue growth and double digit profitability, um 3030 something percent free capital margins.

I think investors have uh a lot to uh to like here in this respect.

Che great having you on the show today.

Appreciate your time and those picks.

Thank you so much.