Two major cybersecurity giants have announced important performance reports! Software stocks' "last-ditch counterattack trend" face a major test.

When the two global leaders in network security, Palo Alto Networks Inc. (PANW.US) and CrowdStrike Holdings Inc. (CRWD.US), announce their quarterly financial reports in the coming days, investors will have a clearer understanding of the recent surge in the stock prices of leading network security companies on the US market and the impact of the "AI Intelligence Storm" ignited by Anthropic on the fundamental growth prospects of network security leaders and even global software giants, whether it is a significant positive factor or a "long-term disruptive nature" negative factor. It is understood that Palo Alto Networks will announce its performance report after the US market closes on Tuesday, with its stock price rising by 57% just last month. CrowdStrike, on the other hand, will announce its financial report after the US market closes on Wednesday, with its stock soaring by 64% in May. The trading prices of these two network security leaders' stocks have just experienced their best single month performance in history, with both reaching record highs after cumulative gains of over 60% since the beginning of 2026, and both being among the top 30 best-performing stocks in the S&P 500 index this year. This surge is mainly driven by market optimism towards software technology companies that are seen as winners in artificial intelligence (AI), such as Snowflake and MongoDB, benefiting from the AI trend. This also marks a significant shift in market sentiment compared to the beginning of the year when network security stocks and the entire software sector were generally falling, as the market was concerned about the potential significant disruption that cutting-edge AI intelligent products like Anthropic PBC's Mythos model could bring. As shown in the chart above, the winners in network security stocks have crushed the market laggards shares of top network security companies have surged significantly in the past few weeks. Jordan Klein, Managing Director of US Markets at Mizuho Securities, said, "People have regained rationality and realize that, no, this won't stop people from buying network security products, in fact, it may create even greater demand for AI-based network security products." If Wall Street sees Palo Alto and CrowdStrike deliver strong performance data this week, "the next bull market rally will be fully unleashed." In other words, in addition to the recent bullish logic stemming from NVIDIA Corporation CEO Huang Renxun's statement at Computex 2026 that "AI intelligence needs more tools and software," the recent significant rebounds of stocks such as Palo Alto, CrowdStrike, ServiceNow, Salesforce, Adobe, and Workday are essentially a market revaluation from the extreme pessimism of "AI intelligence will completely disrupt and replace software companies" to a reshaping of the software market with AI intelligence systems amplifying software demand and reshaping growth-oriented software product forms. The AI-driven bull market in network security resumes! Palo Alto and CrowdStrike financial reports will test recent strong rally in the software sector Currently, most stocks in the global stock market's network security sector are performing hot, making it a true investment highlight in the technology field. The Global X Cybersecurity ETF, with the code: BUG, has risen by 27% year-to-date, with a single-month surge of 37% in May, achieving its best monthly performance since its launch in 2019. In contrast, the iShares Expanded Tech-Software ETF, with the code: IGV, has only risen by 1.9% year-to-date in 2026, mainly due to the pessimistic tone caused by the "AI disruption" brought about by Anthropic in February, leading to a sluggish performance and record declines in software stocks from February to March. However, driven by the recent strong rebound in software stocks, the IGV ETF has significantly outperformed the S&P 500 index in the past two weeks. On the other hand, the NASDAQ 100 index, dominated by tech stocks, has surged by 21% since the beginning of January. To understand how strong financial reports and inspiring prospects can further boost these stocks, one can look at Fortinet Inc. (FTNT.US). The company saw its stock price soar by 20% the day after announcing strong quarterly financial results and raising order revenue expectations in early May. Klein said, this is undoubtedly a very positive sign for Palo Alto and CrowdStrike, as this performance report "quickly makes people rethink that, you know, this is a very outstanding performance, and this situation could also happen with other network security companies engaged in similar businesses." Wall Street analysts generally expect CrowdStrike to achieve a significant revenue growth of 23% and a profit surge of 93% in the most recent quarter ending April 30. Meanwhile, Palo Alto is expected to achieve a 29% revenue growth and 25% net profit growth in the quarter ending April 30. The divergence trend between winners and losers in network security stocks is quite pronounced, as evidenced by Zscaler Inc.'s stock price and market cap last week. After the cybersecurity software manufacturer provided lower-than-expected revenue forecasts, its stock price plummeted by 32% in a single day, marking its worst single-day performance in history. Mandeep Singh, an industry research analyst at Bloomberg, wrote in a report on May 26, "Zscaler's product suite lacks identity security capabilities that tend to favor AI intelligence agents, which may limit its ability to complete larger orders." "In addition, as large peers such as Palo Alto Networks and Fortinet provide bundled security access service edge platforms, it also faces lower net retention rates." As Singh pointed out, leaders in the network security field are usually the largest in scale with strong pricing power and are seen as benefiting from the AI trend in the software sector. On the other hand, investors believe that network security companies may find it challenging to gain a larger market share. Among the 30 component companies in the BUG ETF, more than one-third are in a downtrend this year, with some experiencing significant drops, with the worst-performing Zscaler, Digital Arts Inc., and Rapid7 Inc. falling between 31% and 42%. Joseph Gallo, a senior analyst at Jefferies, wrote in a report released on May 26, "The performance gap reflects investors' general preference for the best-in-class large network security platform leaders, which benefit from supplier integration trends and are believed to be more resilient in an environment of AI disintermediation and the new wave of enterprise AI intelligent operations." "Ahead of non-standard quarterly earnings releases, we believe expectations have risen and the focus will likely be on functional innovation closely related to AI and substantial perception." Regardless of whether the financial reports are strong, the recent gains in the stock prices of Palo Alto and CrowdStrike are extreme, and their further increase may be limited regardless of the performance data and future outlook. Even if the performance exceeds expectations and significantly raises guidance, aggressive selling may be triggered if investors see it as an opportunity to cash in on the recent month's gains. Luke Rahbari, portfolio manager of the Rational Equity Armor Fund, holds shares of Palo Alto, and he does not believe that these financial reports will trigger a market eruption similar to that of Dell Technologies, Inc. Class C, which soared by 47% in the last two trading days due to strong expansion in AI server demand. However, he does believe that the top network security companies will revise their outlook upwards, and may even raise prices, as they now have such strong momentum. He also said, "I don't think these network security companies will see the kind of surge you saw in Dell Technologies, Inc. Class C." "What they are doing is very significant in the current AI intelligent agent trend sweeping through enterprise daily operations, and I think they have a very strong moat in the long term. Network security is now so importantthe importance of network security giants will only grow stronger." Palo Alto, CrowdStrike, and ServiceNow leading the counterattack, software stock panic trading gradually receding? The recent significant rebounds of Palo Alto, CrowdStrike, ServiceNow, Salesforce, Adobe, and Workday, among other software stocks, are essentially a revaluation of market pricing from extreme pessimism that AI will replace or disrupt a certain software company to a model of redefining AI that will amplify software demand and reshape the form of software products. The most representative example in the network security sector is the BUG ETF, which has risen by around 27% this year, with a 37% surge in May alone, achieving its best monthly performance since its launch in 2019. The panic caused by the introduction of the Cowork AI intelligent agent from Anthropic at the beginning of the year, followed by the Mythos model, has not completely disappeared, but its meaning has changed: from "AI will eliminate all network security and software needs" to "AI will reshape the winners and losers structure." For example, Jordan Klein from Mizuho believes that investors have realized that AI will not prevent companies from purchasing security software, but may create more security demands; Jefferies also points out that the market favors large platform leaders, as they benefit from supplier integration and are more resilient in an environment of AI disintermediation. The recent global stock market rally of "missed assets" is also driving the strong rebound of network security giants and the entire software sector. A notable example is ServiceNow Inc.(NOW.US), a software company focusing on optimizing digital workflows, which has surged by over 50% since May. Companies like ServiceNow and other software giants seem to be more of "tech/software stocks missed due to the overflow costs of large-scale AI," rather than typical "big losers disrupted by AI," but to a large extent, they fall under the category of "assets missed due to AI trends or AI disruption panic." The broader rebound of global software stocks is also driven by three positive catalysts: first, reports from software giants like Snowflake and MongoDB reinforce the signal that "AI is still driving enterprise IT spending," and the market is starting to believe that data, cloud, automation, and essential enterprise workflow software will benefit long term; second, the signal from Huang Renxun at Computex, releasing "AI intelligence agents need more tools and software," along with narratives like RTX Spark, promotes a revaluation of the AI monetization ability of platforms such as ServiceNow, Salesforce, Adobe; third, the deep decline in software stocks at the beginning of the year, coupled with the emergence of a crowded short effect, is leading to obvious position adjustments and short squeezes. The analyst team at MarketWatch noted that NVIDIA Corporation and Microsoft Corporation's AI PC/local A-side AI intelligent agent narratives are also actively driving the rise of software stocks such as ServiceNow, Adobe, and Asana, as large-scale AI PC penetration may enhance the daily automation usage of these software targets using end-side AI large models. The tone of "AI disrupting everything" has not completely disappeared, but has shifted from indiscriminate software valuation killings to strict screening of who can turn AI into revenue, and who will be marginalized by AI. Companies like Palo Alto, CrowdStrike, ServiceNow, Salesforce, if they can embed AI into security operations, identity governance, customer service, sales, IT processes, and enterprise data platforms, and demonstrate simultaneous improvements in net retention rates, orders, profit margins, and AI product revenue, they will be seen as AI beneficiaries by the market; conversely, companies with single product modules, lacking platform bundle capabilities, and unable to adapt to AI intelligent agent security and enterprise workflows will suffer valuation discounts. In other words, software stocks have not returned to the "everyone rises" old SaaS bull market, but have entered a new stage of "platform-based software operational flow winner takes all" based on AI technology. From the perspective of AI engineering and industrial logic, the label of "AI losers" is too crude. What is truly vulnerable to AI disruption are single-point software lacking workflow stickiness, data moats, system access points, and compliance audit capabilities; while platform software that can embed AI into core enterprise processes and become the governance layer for agent scheduling may actually benefit from AI. Companies like Palo Alto, CrowdStrike, Snowflake, ServiceNow belong to the latter category, with a higher likelihood, because when AI agents perform tasks in an enterprise, they need to access work orders, customers, permissions, knowledge base, approval flows, and log systems, which will not disappear automatically because the model is stronger, but will become even more critical.