Chief executive officer at Palo Alto Networks Inc., Nikesh Arora attends the 9th edition of the VivaTech trade show at the Parc des Expositions de la Porte de Versailles on June 11, 2025, in Paris.
Palo Alto Networks CEO Nikesh Arora addressed the recent downdraft in software stocks, telling analysts in an earnings call that artificial intelligence won't replace cybersecurity "anytime soon."
"I'm still confused why the market is treating AI as a threat to at least cybersecurity," he said Tuesday. "I can't speak for all of software, but one thing we're definitely seeing is that customers have figured out that they need to drive more consistency in their security stack to be able to respond faster using AI."
Shares sank 7% Wednesday following the cybersecurity company's fiscal second-quarter results, which topped Wall Street estimates. However, third-quarter earnings guidance fell short of expectations.
The rise of new AI tools creating enterprise workflows or websites in a matter of seconds has intensified a selloff in software stocks in recent weeks.
These new tools, from the likes of Anthropic and OpenAI, have left investors fretting over whether AI will permanently disrupt their business models.