Anthropic's Mythos model recently drove a significant rebound in the cybersecurity sector, but the latest earnings season shows that the market's patience for AI dividends is not high. Although Palo Alto Networks and CrowdStrike have both given relatively positive earnings guidance, investors are still waiting for faster revenue results.

Mythos boosts sector expectations

At the beginning of the year, the market was concerned that generative AI would undermine the business models of traditional software and security companies, putting pressure on cybersecurity stocks. Subsequently, Anthropic launched the Mythos model. As this model was seen as potentially useful for discovering and exploiting software vulnerabilities, the market reassessed the demand for cybersecurity products.

Driven by this expectation, shares of CrowdStrike and Palo Alto Networks both surged more than 70% between April and the end of May. Both companies were also early partners in Anthropic's "Project Glasswing" testing program. Anthropic expanded the testing program this week to include another 150 partners, including Rubrik and Tenable.

Financial reports failed to meet higher expectations

This round of earnings reports serves as the first major test after this surge. While the results released by both companies and management's statements regarding AI are generally optimistic, they are still insufficient to meet the market's higher demands for short-term returns.

Jefferies software analyst Joseph Gallo stated that investors may have overestimated short-term expectations. While corporate management has provided guidance for accelerated growth, the commercial benefits of AI are a multi-year process and are unlikely to materialize in a short period.

He pointed out that the sales cycle for enterprise software is typically between 9 and 12 months. If the relevant AI products were only launched in the last quarter or two, expecting a significant jump in revenue now is unrealistic. At this pace, the more noticeable boost to orders and revenue from AI may not be fully apparent until 2027.

The company stated that demand is strong, but fulfillment will still take time.

During the earnings call, Palo Alto CEO Nikesh Arora stated that customer demand has been extremely strong since the introduction of Mythos. More than 1,200 companies have proactively contacted Palo Alto to discuss AI security strategies. In the past six weeks, the company has held approximately 800 related meetings, with Arora personally participating in nearly 100 of them.

However, he also cautioned analysts against expecting significant growth in the next quarter. Businesses still have a complete process from initial contact and procurement to deployment, so a more reasonable assessment is that demand is increasing, but revenue realization will be gradual.

CrowdStrike CEO George Kurtz expressed a similar view. The company raised its forecast for recurring revenue growth driven by AI in fiscal year 2027. He stated that AI Detection and Response (AIDR) could grow into a new market far larger than endpoint security, but it is still in its early stages.

As of now, CrowdStrike's related sales pipeline has exceeded $50 million in the second quarter. This indicates that AI is bringing real business opportunities, but it will still take time to move from high demand to financial realization.