Okta's stock is surging. Here's why identity security has become the next hot thing.

By Hannah Pedone

Barclays upgrades Okta's stock days after Raymond James did the same, saying customers have ramped up investment in identity security for the first time in years

Shares of Okta have rallied more than 20% amid a six-session winning streak.

As artificial-intelligence agents become popular and the threat of digital crime grows, analysts are taking a fresh look at Okta, one of the few companies they say can meet identity-security needs for the agentic era.

And on Monday, Barclays analyst Saket Kalia raised his rating on Okta's stock to overweight from equal weight. Kalia believes the company casts a "wide net" across the identity market, buoying growing demand for the platform.

That upgrade comes a few days after Raymond James analyst Adam Tindle also turned bullish on the stock, saying that based on his checks, Okta's channel partners are "reinvigorating" investment in identity security for the first time in years. This creates potential for a big increase in Okta's market, due to AI agents in the workforce.

This new bullish outlook comes after shares of Okta had previously been caught up in a broad-based selloff of cybersecurity stocks following Anthropic's announcement of the release of Claude Code Security, which heightened investor fears of AI-disruption risks, Stephens analyst Todd Weller told MarketWatch.

Investors got even more worried after Anthropic's Mythos AI model, which was released earlier this month, achieved a perfect score on the company's own cybersecurity benchmark.

Also read: A new era of AI crime has arrived with Anthropic's Mythos

Okta's stock (OKTA) closed on April 10 at the lowest price since December 2022, after falling 27.2% year to date. But with the stock surging 4.9% on Monday, it has now run up 20.4% from that low.

Weller said that the recent rebound in Okta's stock comes as investors look for opportunities amid the cybersecurity and wider software selloff. The iShares Expanded Tech-Software Sector exchange-traded fund (IGV) has rallied 15.6% amid a six-session winning streak, and the Amplify Cybersecurity ETF (HACK) has climbed 11% over the same time frame.

Also read: A new era of AI crime has arrived with Anthropic's Mythos

William Blair analyst Jonathan Ho told MarketWatch that Okta's products have been gaining traction recently, as the agentic AI boom requires new identity products for which the company fills a niche. For instance, companies need solutions to set the right user-account safeguards for agents to ensure they are limited in permissions.

TD Cowen analyst Shaul Eyal told MarketWatch that Okta, which suffered reputational damage after hacking incidents in 2022 and 2023, is one of the few companies that can provide the identity- and access-management solutions needed in the AI era.

And Eyal said identity-related technologies - which answer questions like who a user is and what they are doing on a corporate network - are becoming increasingly important, because every agent on any AI platform, such as ChatGPT or Google Gemini, needs identity credentials.

He added that Palo Alto Networks' (PANW) February acquisition of CyberArk, a major leader in identity and access management, also caused investors to realize that Okta and competitor SailPoint (SAIL) are the last publicly traded pure-play companies standing, he said, making them attractive to investors looking for exposure to that area.

Read more: What's next for investors after the stock market's rebound?

-Hannah Pedone

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04-20-26 2122ET