Cybersecurity Stocks Hit By Anthropic 'Claude Code Security.' JFrog Plunges.

2026-02-20 22:31:26

Cybersecurity stocks and shares in providers of software-development tools retreated Friday after artificial intelligence model builder Anthropic released a preview of “Claude Code Security.” JFrog stock plunged nearly 25% on the news.

Also, Anthropic’s announcement follows OpenAI’s recent statements that it may move into cybersecurity to protect coding tools and AI app development.

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“The broad implications are LLM (large language model) providers will announce more products and compete for incremental cyber budget dollars,” said Jefferies analyst Joseph Gallo in a report.

According to Anthropic, the Claude Code Security tools scan software codebases for security vulnerabilities “that traditional methods often miss” and suggests software patches.

JFrog stock plunged nearly 25% to close at 37.75. Shares in GitLab (GTLB) fell over 8% to 26.39.

Raymond James analyst Mark Cash said the JFrog stock sell-off was overdone.

“Anthropic is prioritizing access for open-source maintainers” Cash said in a report. “If code level quality and vulnerability detection improves meaningfully, enterprises may perceive reduced need for downstream package-level controls such as Jfrog Curation.”

He added: “We view the reaction excessive and believe the market is extrapolating well beyond the current functionality of (Claude Code Security) … Large enterprises require layered security models, and code review does not eliminate software supply chain risk.”

Cybersecurity Stocks Sell Off

Meanwhile, cybersecurity stocks including CrowdStrike Holdings (CRWD), Zscaler (ZS), Rubrik (RBRK) and Palo Alto Networks (PANW) also retreated on Friday.

“We believe Anthropic’s announcement signals an intention to move further into cyber, which will only intensify headline headwinds for our coverage,” added Gallo. “We acknowledge that there is potential for some disruption, within code scanning, SIEM, vulnerability management and the analytics/investigation portion of MDR. But believe that areas such as firewalls and endpoint are largely insulated.”

Software companies, including cybersecurity stocks, have been hammered in 2026 amid concern AI model builders OpenAI and Anthropic will emerge as competitors. There’s growing investor angst over generative AI software coding tools and automated AI assistants, and how they might impact traditional software product growth and profit margins.

Further, the iShares Expanded Tech-Software Sector ETF, an industry index that includes many big-cap software companies, has dropped over 23% in 2026.

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Follow Reinhardt Krause on X, formerly Twitter, @reinhardtk_tech for updates on artificial intelligence, quantum computing, cybersecurity and cloud computing.

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