Shares of CrowdStrike Holdings Inc. (CRWD) are climbing in extended trading Tuesday, thanks to a strong quarterly report from its biggest rival, Palo Alto Networks (PANW). It's a classic case of a rising tide lifting all boats—especially when that tide is AI.

Palo Alto delivered a beat-and-raise third quarter, reporting revenue of $3 billion against estimates of $2.94 billion and adjusted earnings per share of 85 cents versus the 80 cents analysts were looking for. The company highlighted accelerating organic bookings growth, driven by AI-related demand, and noted that AI advancements are reshaping the broader cybersecurity industry.

For the fourth quarter, Palo Alto guided for revenue between $3.35 billion and $3.36 billion and adjusted earnings of 96 to 98 cents per share, both above consensus. It also raised its full-year outlook for revenue and adjusted earnings. Shares of Palo Alto were up more than 4% in after-hours trading.

So why does this matter for CrowdStrike? Palo Alto and CrowdStrike are the two biggest players in cybersecurity. When one talks about booming AI demand, investors naturally start thinking about the other. CrowdStrike reports its own quarterly results after the market close on Thursday, and expectations are already building.

According to data, CrowdStrike is expected to report adjusted earnings of 88 cents per share on revenue of $1.36 billion. The company has a strong track record of beating both revenue and earnings estimates, so the bar is high—but Palo Alto's AI commentary suggests the tailwinds are real.

CrowdStrike shares were up 2.15% in after-hours trading Tuesday, trading at $785.49 at the time of publication. All eyes are now on Thursday's report to see if CrowdStrike can deliver its own AI-powered beat.