2 Cybersecurity Stocks Breaking Out as AI Continues to Be a Tailwind

Key Points

• Artificial intelligence is becoming a cybersecurity tailwind as enterprises adopt more AI tools and face increasingly sophisticated AI-enabled threats.
• Palo Alto Networks is pressing against a major breakout level after strong earnings and continued momentum in its platform strategy.
• Fortinet has already broken to new highs, although analysts remain more cautious after the stock’s powerful year-to-date run.

For a while, the rise of artificial intelligence (AI) looked like it might be a problem for cybersecurity companies. The worry was that leading AI labs could easily replicate and outperform the software built by established cybersecurity companies. There were also worries that AI could easily empower attackers and outpace the defenses these firms had spent decades building. That fear weighed on the group, albeit not for very long. The very force once seen as a threat to cybersecurity is now shaping up as its most powerful tailwind, and several of the sector's heavyweights are breaking out because of it.

And the logic is fairly straightforward. Every enterprise racing to adopt AI opens new vulnerabilities, and AI-powered attacks demand AI-powered defenses. That has turned cybersecurity into one of the most essential corners of the technology budget, not one of the most vulnerable. The shift also comes at an opportune moment, with broad technology strength returning and the Nasdaq-100 pushing back toward its all-time highs as sentiment around the AI trade turns more bullish.

Against that backdrop, Palo Alto Networks NASDAQ: PANW and Fortinet NASDAQ: FTNT are two names flashing genuine signs of strength.

Palo Alto Networks: Pressing Against a Major Breakout Level

Palo Alto Networks has been a standout performer in large-cap technology this year, up nearly 112%. The company is one of the largest pure-play cybersecurity names in the world, and its strategy of convincing customers to run their entire security operation on its platform, rather than stitching together tools from a dozen vendors, has made it a natural first call as enterprises lock down their AI deployments.

The fundamentals have backed the run. In its fiscal fourth-quarter 2026 report released on Sept. 1, Palo Alto delivered earnings of $1.02 per share, topping the 98-cent consensus, on revenue that jumped 34.5% year over year to $3.41 billion, ahead of the $3.35 billion analysts expected. Fittingly, CEO Nikesh Arora added his voice to the shifting narrative this week, calling the idea of slowing down AI "unrealistic," a stance that aligns neatly with a company positioned to profit from AI's continued expansion. The stock carries a Moderate Buy consensus from 50 analysts.

On the chart, Palo Alto has spent several months consolidating within a broad range that has recently tightened, leaving the stock just a few percentage points from its 52-week high breakout level. The all-important level to confirm a breakout is $398.88. The line in the sand for the bulls in the short term is the 50-day simple moving average, which also coincides with support over the prior week's range.

Fortinet: Fresh Off a Breakout to New Highs

Fortinet has been even hotter, with the stock up an eye-catching 120% this year, making it one of the top performers in the entire technology sector. The company is known for its FortiGate firewalls and its broad, tightly integrated security platform. The company's blend of network security and AI-driven protection has resonated strongly as demand for cyber defense accelerates.

Its strength has caught the market's attention, and news sentiment around the name ranks among the highest in the group, reflecting the growing recognition of its position in the AI-security wave. One note of balance worth making, though, is that after such a powerful run, the analyst community remains more cautious, maintaining a Hold consensus with an average price target that now sits below the current share price. That could signal the stock has climbed faster than the Street has been willing to chase.

On the chart, Fortinet is fresh off a breakout to new highs, reaching an intraday record of $181.37 on Thursday, Sept. 24. Going forward, the bulls will want to see the stock hold up after reaching new highs and continue to display notable relative strength to the broader technology sector. The line in the sand, similarly, is the 50-day simple moving average, which coincides with a larger area of support on the higher timeframe near $160.

When the Bear Case Becomes the Bull Case

A group once feared to potentially be on the losing end of the AI revolution has repositioned itself as a clear beneficiary, and the price action in Palo Alto and Fortinet reflects that.

With technology strength broadening and both stocks pressing against or breaking through key levels, these two names are worth watching closely. As always, the breakouts will need to hold to confirm the move, but the fundamental backdrop behind them has rarely looked stronger.