The AI boom has created an unusual second-order trade: investors are no longer betting only on who builds the models and chips, but also on who protects the systems those technologies create. CrowdStrike Holdings, Inc. (CRWD) and Palo Alto Networks, Inc. (PANW) have both more than doubled in six months, suggesting Wall Street is already pricing cybersecurity as part of the AI infrastructure stack.

The Spending Opportunity is Expanding Quickly

Gartner forecasts worldwide spending on AI cybersecurity to rise from $51.3 billion in 2026 to nearly $86 billion in 2027. Separately, the narrower market for securing AI itself is projected to reach $4.8 billion in 2027, up 68.7% from 2026.

The distinction matters. Traditional cybersecurity protects networks, endpoints and identities, while AI introduces new risks around autonomous agents, access controls, model behavior and the software supply chain.

Gartner expects more than half of successful attacks on AI agents by 2029 to exploit access-control weaknesses and prompt injections. That creates another layer of spending as companies move from experimenting with AI to deploying agents that can actually act inside corporate systems.

CrowdStrike Has the Growth

CrowdStrike's stock has gained 166.1% over six months, 119.6% year to date and 114% over the past year. Its market capitalization is now about $265.5 billion, according to market data.

The rally isn't happening without fundamental support. CrowdStrike reported record net new annual recurring revenue of $333 million in its latest quarter, up 51% year over year, while ending ARR from customers using its Falcon Flex offering reached $2.29 billion, up 101%. The company also raised its full-year net new ARR growth outlook to 34% at the midpoint.

But investors are paying heavily for that growth. CRWD trades at roughly 208x forward earnings and 49x sales.

Palo Alto Has the Platform

Palo Alto's stock has climbed 140.1% over six months, 107.8% year to date and 89.2% over the past year, giving the company a roughly $320.7 billion market capitalization.

Its latest results provide a different piece of the AI-security thesis. Palo Alto said customers are turning to its platforms to secure AI deployments at scale, while CEO Nikesh Arora said advances in AI are elevating cybersecurity on CIO priority lists. The company added nearly $1 billion of net new next-generation security ARR in its latest quarter and is targeting $20 billion of NGS ARR by fiscal 2030.

PANW trades at about 93.5x forward earnings and 26x sales.

That leaves investors with a more complicated question than whether AI will create more cyber threats. The market already believes it will.

The question is whether CrowdStrike's accelerating ARR and Palo Alto's expanding security platform can grow fast enough to justify valuations that have already anticipated years of AI-driven demand. The next leg of the trade may depend less on fear of AI attacks and more on how much security spending those attacks actually create.