What Happened?
A number of stocks fell in the afternoon session after Anthropic announced that its Claude AI assistant can now control computers to complete tasks by imitating human keystrokes and mouse movements.
This "Computer Use" capability fundamentally disrupts the endpoint security model, which historically focused on protecting human-driven activity. If the primary "user" of a workstation is an AI agent rather than a human, the traditional endpoint protection platform (EPP) becomes misaligned with the new threat surface.
The pressure was compounded by Databricks' move into the space with LakeWatch, which integrates telemetry from all devices into a single AI-powered "Security Lakehouse." As the industry shifts toward "agentic security" frameworks like Nvidia's NemoClaw, investors are concerned about reduced demand in the "per-seat" licensing revenue for some endpoint security companies.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Endpoint Security company SentinelOne (NYSE:S) fell 8.8%. Is now the time to buy SentinelOne? Access our full analysis report here, it’s free.
- Endpoint Security company Varonis Systems (NASDAQ:VRNS) fell 6.9%. Is now the time to buy Varonis Systems? Access our full analysis report here, it’s free.
Zooming In On SentinelOne (S)
SentinelOne’s shares are quite volatile and have had 17 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 11 days ago when the stock gained 3.7% on the news that the company reported mixed fourth-quarter results and provided a similarly mixed outlook, causing initial after-hours selling before the stock recovered. The cybersecurity firm's revenue grew 20.2% year-over-year to $271.2 million, meeting analyst expectations, while its adjusted earnings per share of $0.07 beat estimates. Annualized recurring revenue (ARR) also increased by 21.6% to $1.12 billion. However, the company's outlook created uncertainty. While its full-year earnings guidance was impressively strong and beat expectations, its revenue forecast for the upcoming quarter was only in line with estimates, and its earnings guidance for the same period missed. This mixed picture of solid current results against a less certain near-term outlook, combined with signs of decelerating long-term growth, led to the stock's volatility as investors weighed the conflicting signals.
SentinelOne is down 10% since the beginning of the year, and at $13.18 per share, it is trading 35.2% below its 52-week high of $20.34 from May 2025. Investors who bought $1,000 worth of SentinelOne’s shares at the IPO in June 2021 would now be looking at an investment worth $310.09.
ONE MORE THING: The $21 AI Application Stock Wall Street Forgot. While Wall Street obsesses over who’s building AI, one company is already using it to print money. And nobody’s paying attention.
AI chip stocks trade at ridiculous valuations. This company processes a trillion consumer signals monthly using AI and trades at a third of the price. The gap won’t last. The institutions will figure it out. You need to see this first. Read the FREE Report Before They Notice.