anthropic launches nvidia while meta expands its platform

Key Takeaways

• Cybersecurity stocks, including CrowdStrike, Palo Alto Networks, and Zscaler, are facing investor fears due to new AI tools, but analysts believe AI will ultimately benefit the sector by increasing demand for robust security.
• Anthropic's Claude Code, an AI tool, has significantly impacted IBM's stock by automating the modernization of COBOL code, a key legacy business for IBM.
• Claude Code can analyze and document COBOL systems in months, a task that traditionally takes years, potentially disrupting the legacy system update market.
• OpenAI removed the word 'safely' from its mission statement after becoming a for-profit company, raising concerns among experts about its long-term priorities.
• Nvidia is expanding its partnership with Meta, supplying data center CPUs and GPUs, which directly competes with Intel in the data center market.
• Nvidia's upcoming earnings report is expected to calm 'AI ghost trade' fears, with analysts projecting strong growth in its AI infrastructure business.
• Marvell Technology is a critical player in AI infrastructure, providing high-speed connectivity and custom silicon for data centers, with Amazon as an initial customer for its Celestial AI acquisition.
• The impact of AI is spreading beyond software, affecting various industries and leading to shifts in investment, including a move towards real estate investment trusts (REITs).
• Jefferies has downgraded several Indian IT services stocks, including Infosys and TCS, due to concerns that AI will fundamentally change business models and lower valuations.
• Sirion, an AI-powered contract lifecycle management company, received a majority investment from Haveli Investments to accelerate its product development and global expansion.

AI fears hit cybersecurity stocks CrowdStrike, Palo Alto

Cybersecurity stocks like CrowdStrike, Palo Alto Networks, and Zscaler are facing pressure due to fears that new AI security tools could disrupt their business. Analyst Dan Ives believes these fears are overblown, calling it an 'AI ghost trade.' He argues that AI actually creates a huge opportunity for cybersecurity companies. Ives sees CrowdStrike as the 'gold standard' and views Palo Alto Networks' recent acquisition as a potential game-changer. He expects all three companies to benefit from increased cybersecurity spending as businesses defend against evolving AI threats.

Analysts urge buying cybersecurity stocks despite AI fears

Cybersecurity stocks are falling due to worries that AI tools might disrupt the industry, but analysts suggest buying them at a lower price. Companies like CrowdStrike and Cloudflare saw significant drops after Anthropic released an AI tool that scans code for vulnerabilities. However, experts believe these AI companies will focus on securing their own models rather than replacing core cybersecurity infrastructure. Analysts from UBS and JPMorgan see CrowdStrike, Okta, and Zscaler as potential beneficiaries of AI adoption, noting that established companies have strong networks and experience that clients value.

Cybersecurity stocks face AI fears but experts say buy

Investors are selling off cybersecurity stocks due to fears that AI tools like Anthropic's Claude Code could disrupt the industry. However, experts like Jim Cramer and Jeff Marks argue that these fears are overblown and that cybersecurity companies are essential for protection against AI-powered threats. They believe that while AI companies may offer some security products, they are unlikely to replace the core infrastructure provided by companies like CrowdStrike and Palo Alto Networks. Analysts from JPMorgan and UBS agree that cybersecurity fundamentals remain strong and that AI adoption will ultimately benefit the sector.

IBM shares drop as AI tool threatens COBOL modernization business

IBM's stock fell sharply after Anthropic announced its AI tool, Claude Code, can automate the complex process of modernizing COBOL code. COBOL, a programming language from the 1950s, is still widely used in critical systems for finance and government, and IBM has long profited from maintaining these systems. Anthropic's tool can analyze and document thousands of lines of COBOL code much faster than human analysts, potentially reducing the need for IBM's services. This development adds to recent AI-driven selloffs in the tech sector, impacting companies like cybersecurity firms.

IBM stock plunges on Anthropic's new COBOL AI tool

IBM's stock dropped significantly after Anthropic launched Claude Code, an AI tool designed to speed up the modernization of COBOL systems. This new tool automates the analysis and documentation of COBOL code, a process that traditionally requires extensive consulting work from firms like IBM, Accenture, and Cognizant. COBOL remains vital for many financial and government systems, but the shrinking pool of developers who understand it makes modernization challenging. Anthropic claims its AI can complete modernization tasks in months instead of years, potentially disrupting the legacy system update market.

OpenAI removes 'safely' from mission after going for-profit

OpenAI, the creator of ChatGPT, has changed its mission statement six times and recently removed the word 'safely' when it restructured into a for-profit company. This change, noted in its latest IRS filing, has raised concerns among experts like Alnoor Ebrahim that the company might prioritize profits over safety. While OpenAI states its mission is to ensure AI benefits all of humanity, the removal of explicit safety language from its core mission statement is seen by some as a sign of shifting priorities. The company's restructuring followed a significant funding round, which came with conditions that led to the for-profit model and investor involvement.

AI market disruption spreads beyond software

The impact of artificial intelligence is now spreading beyond software companies, affecting various industries as fears of disruption grow. Lower barriers to entry in the AI market mean that companies have less protection against competition. This has led to a shift in investment, with capital moving towards real estate investment trusts (REITs) that are seen as more resistant to AI's effects. The article suggests that the AI market crash is worsening as more sectors face potential disruption.

Nvidia earnings could end AI 'ghost trade' fears

Nvidia's upcoming earnings report is expected to be a key event that could calm fears surrounding the 'AI ghost trade,' where investors worry AI startups will disrupt established tech companies. Analyst Dan Ives believes Nvidia will exceed expectations, potentially reigniting the AI trade. Despite concerns about AI startups undercutting software players, Nvidia's strong performance in AI infrastructure, including chips for data centers and future AI applications, is highlighted. Analysts project significant revenue and earnings growth for Nvidia, with many rating its stock a 'Strong Buy.'

Marvell Technology: A key player in AI infrastructure

Marvell Technology Inc. is a crucial company for artificial intelligence infrastructure, providing high-speed connectivity and custom silicon for data centers. Its components enable fast communication between AI accelerators. While UBS has lowered its price target for Marvell due to integration costs from the Celestial AI acquisition, it maintains a 'Buy' rating. The acquisition is expected to boost revenue starting in fiscal 2028, with Amazon as an initial customer. Despite near-term earnings pressure, Marvell's strong financial position and expanding technology portfolio support its long-term growth potential in the AI market.

Haveli Investments backs Sirion to boost AI in contract management

Sirion, a company focused on AI for contract lifecycle management, has received a majority investment from private equity firm Haveli Investments. This partnership aims to speed up product development, expand Sirion's global reach, and help businesses move towards smarter, workflow-driven contract management. Sirion's CEO, Ajay Agrawal, stated that the investment will help simplify the company's board structure and accelerate its AI roadmap. Haveli Investments, founded by Brian Sheth, brings significant software investment experience. The deal is described as a strategic move to unify the board and enhance Sirion's competitive edge in the AI market.

Nvidia expands Meta deal, challenging Intel in data centers

Nvidia is increasing its partnership with Meta, supplying both data center CPUs and GPUs, which directly competes with Intel's core business. This expanded deal positions Nvidia as a major supplier for Meta's AI and cloud infrastructure, an area where Intel has traditionally been a key provider. The move puts pressure on Intel, which is already facing supply issues and competition from other chipmakers. If Nvidia secures a larger share of Meta's business, it could signal a significant shift in the data center market away from traditional CPU providers towards integrated solutions.

Jefferies cuts IT stock ratings amid AI disruption fears

Jefferies has become cautious about India's IT services sector, warning that artificial intelligence could fundamentally change business models and lower stock valuations. Despite a recent rebound in IT stocks, Jefferies believes the risk-reward balance is unfavorable. The firm has lowered earnings estimates and price targets for several major IT companies, downgrading Infosys, HCLTech, and Mphasis to 'Hold,' and TCS, LTIMindtree, and Hexaware to 'Underperform.' Jefferies predicts AI will shift revenue towards consulting and away from traditional managed services, potentially increasing volatility and requiring significant operational changes for IT firms.

Sources

• CrowdStrike, Palo Alto Hit By ‘AI Ghost Trade’ Fears - CrowdStrike Holdings (NASDAQ:CRWD), Palo Alto Networks (NASDAQ:PANW), Zscaler (NASDAQ:ZS)
• Cybersecurity stocks are the latest AI victim. Analysts say buy the dip
• Cybersecurity stock selling deepens on AI threat concerns. Why we're not bailing
• IBM is the latest AI casualty. Shares are tanking 11% on Anthropic programming language threat
• IBM stock tumbles 10% after Anthropic launches COBOL AI tool By Investing.com
• OpenAI changed its mission statement 6 times in 9 years. It finally removed the word “safely” as a core value when it restructured into a for-profit
• The AI Market Crash Just Got A Lot Worse
• Strong Earnings from Nvidia Could Help End the 'AI Ghost Trade.' Should You Bet on NVDA Stock Now?
• Is Marvell Technology, Inc. (MRVL) One of the Best AI Stocks That Will Go to the Moon?
• Sirion Completes Majority Investment from Haveli, Aiming to Accelerate AI Push in CLM Market
• Nvidia Meta Deal Tests Intel’s Hold On AI Data Center CPUs
• Jefferies Warns 'P(AI)n Not Over Yet', Cuts Ratings on Six IT Stocks