Anthropic gives our cyber stocks and other big tech names an AI stamp of approval
Project Glasswing. Sounds like something out of a spy movie. But those two words from AI poster-child Anthropic, and the efforts behind it, have sent beaten-down cybersecurity stocks soaring, along with a host of other megacap names. Glasswing — named after a butterfly with see-through wings as a metaphor for finding bugs in plain sight — is aimed at securing the world’s most critical software with the help of Anthropic’s new AI model. Unlike past Anthropic announcements that resulted in a fire sale of anything and everything investors could think of being even slightly disrupted by AI, this one was a breath of fresh air. Why? Because this project will see Anthropic join forces with a who’s who of Club names, including Amazon ‘s AWS cloud unit, Apple , Broadcom , CrowdStrike , Palo Alto Networks , Alphabet ‘s Google, Microsoft , and Nvidia . Also mentioned were JPMorgan , the Linux Foundation, and former Club stock Cisco Systems . Anthropic may not be a Wall Street research firm, but you better believe that investors are reading this press release as if it were a coverage initiation with every company named getting a stamp of approval for the AI-era. The announcement late Tuesday makes quite clear that not everything can be vibe-coded into existence. Sometimes, best-in-class partners are needed, even if you’re an AI unicorn. As Anthropic put it, “No one organization can solve these cybersecurity problems alone: frontier AI developers, other software companies, security researchers, open-source maintainers, and governments across the world all have essential roles to play.” Project Glasswing comes ahead of the release of Anthropic’s highly anticipated Mythos model — the mere mention of its advanced cybersecurity capabilities late last month sent investors in cyber stocks and others running for the exits. We have been arguing that these AI-induced selloffs are wrong. AI should increase the need for cybersecurity, not diminish it. While AI can help defend against cyberattacks, it is but a tool in the cybersecurity tool chest, not in and of itself a replacement for the full security platforms from CrowdStrike and Palo Alto Networks. Moreover, AI also represents a powerful new tool for bad actors to exploit. Glasswing is the clearest move from Anthropic in support of our view. As Anthropic said in its release, AI models are now at a “level of coding capability that can surpass all but the most skilled humans at finding and exploiting software vulnerabilities.” However, that doesn’t make cybersecurity companies obsolete; it makes them all the more important. “It will not be long before such capabilities proliferate, potentially beyond actors who are committed to deploying them safely. The fallout — for economies, public safety, and national security — could be severe. Project Glasswing is an urgent attempt to put these capabilities to work for defensive purposes,” Anthropic wrote. So, where does this leave us? Well, the announcement couldn’t come at a better time. One concern that’s been floating around Wall Street has been that when the war with Iran, now more than five weeks old, is fully resolved, investors would turn back to the sell AI disruption/buy companies with “heavy assets, low obsolescence.” That so-called HALO trade had been demolishing the tech sector before the war with Iran. The view being that AI tools will enable companies to develop software internally in lieu of current suites from the likes of ServiceNow or Club name Salesforce — or at the very least, operate with a lower headcount, resulting in less demand for enterprise software companies that charge by the seat. The Anthropic announcement doesn’t necessarily counter that trade, but should bring more nuance to it. It’s been the lack of nuance that’s been most frustrating for us as fundamental investors focused on bottom-up analysis . While we have felt the pain through our positions in Salesforce, CrowdStrike, Palo Alto Networks, and, to some extent, Microsoft, it was the cybersecurity names that we advocated buying into the decline. We have done that in the case of CrowdStrike. We think the selling in Salesforce is overdone, and the company shouldn’t be counted out. However, we can at least understand the concerns that demand could wane as Salesforce customers learn to do more with fewer employees or code some tools internally. As it relates to our cyber names, however, we have argued that the price action has been nonsensical. More powerful cyber tools out in the world should result in more demand for security, not less. Anthropic’s new push to form a coalition of the world’s most powerful companies in defense of critical tech infrastructure makes that view all the more clear. We can’t take the Anthropic news as an all-clear to back up the truck on large swaths of the software segment of the market, as it does indicate that Mythos will be incredibly powerful and capable of disrupting at least some of today’s go-to software solutions. However, the Iran ceasefire agreement has put a near-term bottom in tech , especially in those names named as a part of Glasswing. .SPX .IXIC YTD mountain S & P 500 and Nasdaq YTD Scanning the market, try not to frame your thinking entirely around Wednesday’s move. The Iran deal, as tenuous as it may be, sent West Texas Intermediate crude plunging more than 15% and the S & P 500 and Nasdaq each soaring over 2%. While we generally don’t advocate chasing big rallies, it’s important not to allow the positive price action of this past week to cause you to forget that many of these tech names are still down materially for the year, and may still be able to help lower your overall cost basis. For those looking to get a final buy or two in on cyber, Jim Cramer said during Wednesday’s Morning Meeting that, between our two cyber names, CrowdStrike remains our preferred play. “I know it’s expensive, but I do think CrowdStrike is going to hit an all-time high,” Jim predicted. Don’t expect that to happen overnight, though. CrowdStrike traded around $430 per share on Wednesday, which is still way below its record close of just over $557 back in November. It’s never easy to buy a stock that’s moved sharply off a recent low. Rather than being paralyzed thinking you missed the move, consider that the facts have changed, regarding both Iran and oil (for now), and in terms of how the market will view the names listed as initial partners in Project Glasswing going forward. We usually think of buying at lower prices as a way to increase our margin of safety. We must also understand that sometimes, it’s safer to pay up for a bit after new information comes to market than it is to try and catch a falling knife, while hoping for a sentiment-changing update to come through. (Jim Cramer’s Charitable Trust is long AAPL, AVGO, CRWD, PANW, GOOGL, MSFT, NVDA, CRM. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. 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