Citi Wealth CIO warns infinite AI agents to lift cybersecurity budgets 60%

Citi Wealth Chief Investment Officer Kate Moore warned that AI-powered agents are expanding enterprise attack surfaces faster than security budgets can adapt, creating a multiyear growth driver for cybersecurity vendors.

"We're not talking about a single kind of cyber attack or a series of people that could be engaging in it, but almost infinite AI agents across a huge attack surface that could be taking down people's data," Moore said in a CNBC interview Tuesday.

Moore said cybersecurity remains too small a share of enterprise technology spending even as threats shift from human-operated breaches to autonomous AI-driven attacks. Palo Alto Networks reported $3 billion in Q3 revenue, up 31% year over year, with next-generation security ARR jumping 60% to $8.1 billion. CrowdStrike posted $1.39 billion in Q1 revenue, up 26%, with ending ARR reaching $5.51 billion.

The implication for investors is that cybersecurity allocations could expand further as companies defend against AI-generated threats. Palo Alto shares have gained 89% year to date through July 20, while CrowdStrike trades at 164 times forward earnings, reflecting the premium the market assigns to security platforms positioned for the AI era.

Moore's broader market view reinforces the case for staying invested. She said the current rally is earnings-driven, not multiple expansion, and that pullback windows in spring 2026 lasted only days, leaving cash-heavy investors with few entry points. Real GDP grew at a 2.1% annualized rate in the fourth quarter of 2025, and core PCE rose 0.3% month over month in May 2026 to 130.08.

Which Cybersecurity Vendors Stand to Benefit

The CIO's thesis finds support across the sector. Zscaler reported $850.5 million in Q3 revenue, up 25% year over year, with enterprise AI usage across its platform jumping 91% to more than 3,400 applications. Yet the stock has fallen 33% year to date, suggesting the market has not fully priced in the AI security opportunity. SentinelOne posted record net new ARR of $44 million in its fiscal first quarter, up 55% year over year, with total ARR reaching $1.16 billion. Chief Executive Tomer Weingarten said "securing the AI era requires machine speed defense which only truly modern infrastructure can deliver."

Cloudflare reported $639.8 million in first-quarter revenue, up 34% year over year, with remaining performance obligations growing at the same pace. Chief Executive Matthew Prince called AI "the biggest tailwind we've ever seen in Cloudflare's history." The stock trades at $271.43, above the average analyst target of $254.36, indicating expectations are already elevated.

The Investment Case

Moore described the behavioral challenge for investors: the longer they sit on the sidelines, the fewer opportunities they get to buy on pullbacks. For cybersecurity specifically, the combination of AI-driven threat proliferation and still-inadequate budget allocation creates a structural growth story that transcends quarterly earnings cycles. Palo Alto's NGS ARR growing 60% and CrowdStrike guiding for full-year revenue of $5.91 billion to $5.96 billion suggest the sector's momentum has room to run.

This article is for informational purposes only and does not constitute investment advice.