Nathaniel Whittemore

More broadly, Goldman Sachs analyst Peter Oppenheimer believes the worst is over for tech stocks in general.

In a Tuesday note, he wrote that tech's underperformance this year is starting to create opportunities as, quote, its valuation relative to expected consensus growth has fallen below that of global aggregate market.

He noted that past quarter was one of the weakest performances in 50 years for tech stocks relative to global markets.

The weakness has been entirely driven by fears around infrastructure spending, and then, of course, the shift to fears of AI disruption.

Cybersecurity is also gathering attention as one subsector where the narrative of AI disruption was especially overdone.

Manthan Shah of Westbridge Capital said, Right now software investors are selling first and asking questions later, but I think we'll look back and see this as a really interesting time to get into security.

This is one of the top areas where we're excited about the long-term potential.

Shah believes that investors were getting the AI cybersecurity narrative completely wrong.

He said AI is going to massively increase the surface area that can be vulnerable, meaning the need for security is going to compound significantly going forward.

I'm going to slap a big old duh on that one, as the major story of our week was of course Anthropix Mythos, completely freaking everyone out when it comes to, what was it again?

Oh yeah, cybersecurity.

Multiple analysts have upgraded cybersecurity stocks in recent weeks, noting that AI changes the nature of security budgets, but very likely won't decrease them.

Piper Sandler analyst Rob Owens argued that AI is, quote, an opportunity, not a replacement threat, because it will create the next multi-billion security opportunity as enterprises look to secure a new attack surface.

Even those who believe software is in for a rough year still think security could be an exception.

Ryan Asherwood, the CIO of Significance Capital Management said, It seems hard to imagine that security stocks will get the premium multiples they've been afforded in the past, but it still looks like the best place to be within software.

We don't want to touch a lot of application software stocks, but within software, cyber looks like the best house in a bad neighborhood.

Now, speaking of market forces, Anthropic has wrapped up their tender offer, but very few employees are cashing out.

Last month, Anthropic gave employees the option to sell their stock into the secondary market.

The stock was valued according to the last venture funding round completed in February, which gave Anthropic a $380 billion valuation.

That mark felt to many already a little cheap by the time the round closed, but that sense rapidly increased as Claude Code took over the world in the following month.