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Why Netskope Stock Crushed it This Week
Key Points
Some AI developers issued public warnings about what might happen if control over the technology is lost.
An analyst also initiated coverage of the company with quite a bullish take.
Riding a wave of improving sentiment on cybersecurity stocks and bolstered by a bullish new analyst take, data security specialist Netskope (NASDAQ: NTSK) was a winning stock this week. According to data compiled by S&P Global Market Intelligence, its share price rose by nearly 19% over the period.
Cyber-scares
The tech sector was rocked this week by warnings from several very high-profile figures directly involved in artificial intelligence (AI) development. Perhaps most notably Dario Amodei, CEO of Anthropic (developer of the popular Claude model) proposed slowing down the feverish pace of AI advancement so as to ensure it's safe.
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Image source: Getty Images.
This highlighted the potentially serious threat a "rogue" AI model could pose. As a result, investors snapped up shares of cybersecurity stocks, as most of these companies have lately concentrated hard on coping with AI threats. Netskope benefited from this take-up.
Another factor lifting the stock was the initiation of research coverage. Stephens' Todd Weller launched his tracking of Netskope's shares with an overweight (buy, in other words) recommendation and a price target of $21 per share.
Good times for a good company
These are prosperous times for all manner of cybersecurity companies, and that rising-tide-lifts-all-boats situation alone is sure to at least support Netskope's stock price. Meanwhile, I don't think those fears of AI will dissipate anytime soon, maintaining an environment where cybersecurity solutions aren't only a fine idea, they're a necessity for many organizations. This company's future looks bright.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.