Key Points
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Cybersecurity stocks gained ground amid calls by prominent CEOs to slow AI development.
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Okta’s multi-factor authentication and user login management tools have become critically important.
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The stock isn’t exactly cheap, but the road ahead is long.
- 10 stocks we like better than Okta ›
Shares of Okta (NASDAQ: OKTA) charged out of the gate Monday, gaining as much as 11.8%. As of 11:32 a.m. ET, the stock was still up 11.2%.
The catalyst that sent the cybersecurity specialist higher was the calls by prominent industry insiders for a slowdown in artificial intelligence (AI) development.
Slow your roll
In a treatise released over the weekend, Anthropic CEO Dario Amodei called for a slowdown in the pace of AI development. He said that “like many technologies before it, AI brings risks, and because it is such a powerful technology, these risks are serious.” Amodei’s concerns included the” risk of losing control of AI systems, misuse for cyberattacks and bioterrorism, and serious economic disruption.” He pointed to the high-profile hack of Hugging Face by OpenAI models as evidence of the need for caution.
Other chief executives joined the chorus, including Space Exploration Technologies, aka SpaceX, CEO Elon Musk, who said in a post on X, “Dario is right.” OpenAI CEO Sam Altman also sided with Amodei, who inked his own essay, calling for “consistent rules to manage frontier (model) risk.” He stopped short of calling for a moratorium, saying slowing the pace of AI development does “not mean stopping.”
So what does this have to do with Okta?
One of the biggest concerns regarding AI is the potential for hackers to misuse the technology for cyberattacks. Okta’s cloud-based platform manages user logins and provides multi-factor authentication to ensure that only authorized users can access organizational systems.
Justifiable concerns about the potential abuse of AI have shone a spotlight on cybersecurity and accelerated the adoption of appropriate tools to secure business systems. Okta has long been at the forefront of identity verification, a trend that will only become more important as AI proliferation continues.
At 42 times next year’s expected earnings, the stock isn’t exactly cheap; however, the need for Okta’s services has never been greater.
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Danny Vena, CPA has positions in Okta. The Motley Fool has positions in and recommends Okta. The Motley Fool has a disclosure policy.