Evercore's Peter Levine talks 2026 cybersecurity playbook

Core Insights - The cybersecurity sector is experiencing a divergence in performance, with companies like Cloudflare and Crowdstrike performing well, while others like Sentinel 1 and Fortinet are struggling [1] - There is a potential paradigm shift in cybersecurity driven by geopolitical tensions, increased sophistication of cyber attacks, and regulatory requirements, which may lead to increased demand for cybersecurity solutions [3] - The trend towards consolidation in the cybersecurity market is expected to continue, with larger companies acquiring smaller firms to streamline operations and enhance AI capabilities [6] Company Performance - The CIBR ETF has underperformed compared to broader tech indices this year, particularly in the last three months [1] - Crowdstrike, Zscaler, and Rubrik have shown positive performance, indicating a potential shift in investor focus towards these companies [2] - Companies like Palo Alto Networks are positioned well for consolidation, as they possess a comprehensive cybersecurity stack [7] Market Trends - The rise of AI is influencing the cybersecurity landscape, with expectations that AI monetization will increase in the coming years [3] - There is a notable trend of traditional software companies entering the cybersecurity space, as seen with ServiceNow's acquisition of Armis for $7 billion [5] - The consolidation trend is beneficial for companies like Crowdstrike and Palo Alto, as they can acquire struggling firms at lower valuations [6]