May 21, 2026 - In March 2026, Cybersecurity equities were in freefall. The narrative: AI would commoditize security and crush margins. Institutions were selling aggressively.
What the market missed: Equity Analyst Janice Quek's thematic research identified three critical catalysts:
- escalating Iran conflict supporting security spend
- AI expanding attack surfaces faster than defenses could scale
- structurally protected security budgets immune to broader software selloff
Technical confirmation arrived in parallel. By May, Lowry Research’s Michael Kahn revealed what fundamental investors couldn't see: the Computer Software Group – including cybersecurity names – had formed classic basing patterns with emerging Demand. Power Ratings on CRWD, PANW, and ZS showed positive divergences even as prices made new lows. The technical setup was textbook: exhaustion selling giving way to accumulation.
The outcome: Cybersecurity stocks we flagged with positive implications (CRWD, PANW, OKTA, ZS) returned +28% average over eight weeks vs. +12% for the broader market – a 16-point outperformance. CRWD and PANW broke above their 150-day moving averages on surging Power Ratings, confirming the fundamental thesis with technical validation.
Forward-looking view: As enterprises operationalize AI agents, the security layer becomes more mission-critical, not less. Our May technical review confirms: "software has found its floor." Vendors with end-to-end platforms (CRWD, PANW) maintain the strongest defensive moats against both AI disruption.