Why Investors Question Cybersecurity Growth in the AI Era

Fatima Boolani of Citi on Why AI Isn't Driving Expected Cyber Budget Growth Michael Novinson (MichaelNovinson) • March 28, 2026

Security budgets have long been a safe haven for investors, but that's now a problem. Artificial intelligence's expansion of the attack surface has yet to drive the budget growth investors expect, and that gap is weighing on cybersecurity valuations, said Fatima Boolani, managing director and co-head of U.S. software equity research at Citi.

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The disconnect was most evident in early 2026, when several cybersecurity vendors beat earnings and raised guidance, yet still saw their stock prices fall.

"We haven't seen realizable growth in those budgets. We've definitely seen an uptick in budgetary growth, but it's not an order of magnitude better, as you would maybe expect with AI being a vector that's consequentially changing ...