Key takeaways
- Cramer sees upside in Palo Alto Networks and CrowdStrike as AI boosts cybersecurity demand.
- These Jim Cramer cybersecurity stocks are expanding protection for cloud, endpoints, and AI systems.
- Growth is strong, but valuations and volatility remain key risks.
Palo Alto Networks and CrowdStrike could see further demand for their security services as artificial intelligence expands both business opportunities and cyber risks.
AI is Increasing Demand for Cybersecurity
Jim Cramer pointed to the two companies as Jim Cramer cybersecurity stocks that could continue climbing as AI changes the threat landscape. His view rests on a simple shift: companies are using AI more widely, while attackers can also use the technology to find weaknesses and scale their activity.
Recent industry data supports the broader trend. CrowdStrike said its 2026 threat research found that AI has become embedded in modern attack operations. The company said attackers can use AI to identify vulnerabilities faster, target enterprise AI systems, and expand attacks across software supply chains.
Palo Alto Networks has also described a faster threat environment. Its Unit 42 research found that the fastest attacks moved from initial access to data theft in as little as 72 minutes, while AI helped accelerate attack activity.
Palo Alto Networks Builds on Strong Growth
Palo Alto Networks has reported strong growth as businesses seek broader security platforms. In its fiscal third quarter, revenue rose 31% year over year to $3 billion. Its next-generation security annual recurring revenue increased 60% to $8.1 billion.
The company has also increased its focus on securing AI systems and autonomous agents. In May, it completed the acquisition of Portkey, adding technology aimed at monitoring and governing AI agents and their interactions.
Palo Alto Networks’ results also show why investors have focused on the company during the AI shift. Its remaining performance obligations reached $18.4 billion in the third quarter, up 36% from a year earlier. The company expects fiscal 2026 revenue of about $11.4 billion, supporting continued investor interest in Jim Cramer cybersecurity stocks.
CrowdStrike Expands Its AI Security Platform
CrowdStrike has taken a similar approach by adding AI-focused capabilities to its cybersecurity platform. Its investor materials show $1.39 billion in revenue and $5.51 billion in ending annual recurring revenue for the fiscal first quarter of 2027.
The company has also developed security offerings aimed at AI systems and security operations. Its recent threat research highlights how AI can shorten the time attackers need to exploit vulnerabilities, increasing pressure on companies to detect and respond to threats quickly.
CrowdStrike is scheduled to report its fiscal second-quarter 2027 results on August 26. That update will give investors a fresh view of customer demand, recurring revenue growth, and the company’s expectations for the rest of the year. The results could also influence investor sentiment toward Jim Cramer cybersecurity stocks.
For both companies, the AI boom creates a mixed picture. More AI use can expand the need for cybersecurity, but investors must still weigh high expectations, competition, and stock-price volatility. Cramer’s view highlights the sector’s potential, but future performance will depend on whether strong business growth continues to justify those expectations.
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