What Happened?
Shares of identity management company Okta (NASDAQ: OKTA) fell 9% in the afternoon session after Anthropic unveiled Claude Code Security, a tool designed to autonomously scan codebases for vulnerabilities and suggest targeted software patches.
Historically, cybersecurity value was tied to human-intensive monitoring and proprietary software moats. However, Claude Code's ability to autonomously write, test, and refactor production-grade code, as well as its documented role in the first large-scale, AI-orchestrated cyberattack shifted market sentiment. The market's reaction was further driven by fear that AI is shifting from a supportive "copilot" to a direct substitute for high-margin, specialized security software. As a result, investors are increasingly skeptical of the long-term pricing power of legacy firms if "good enough" security remediation can be embedded directly into the development workflow by an AI agent.
The shares closed the day at $74.32, down 9.1% from previous close.
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What Is The Market Telling Us
Okta’s shares are somewhat volatile and have had 14 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 3 days ago when the stock dropped 6.1% on the news that investor fears over artificial intelligence disrupting the software industry sparked a broad sell-off.
The anxiety stemmed from the rapid adoption of new 'agentic AI' tools, which some investors believed could dismantle traditional Software-as-a-Service (SaaS) business models. This 'AI Panic' led to indiscriminate selling across the sector. The market move reflected growing concerns about the downside of the AI boom for established software companies.
Okta is down 11.4% since the beginning of the year, and at $74.13 per share, it is trading 41.8% below its 52-week high of $127.30 from May 2025. Investors who bought $1,000 worth of Okta’s shares 5 years ago would now be looking at an investment worth $270.07.
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