Nvidia, SK hynix tumble on AI doomsday fears — but cybersecurity stocks surge

Amid growing alarm over AI doomsday scenarios, investors are piling into cybersecurity stocks as fears mount over AI-enabled cyberattacks.

Business Insider reported Tuesday that the cybersecurity sector is emerging as a beneficiary of broader anxieties about AI's existential risks, even as the rest of the technology market sells off.

On Monday, New York stock markets saw a wave of selling concentrated in AI and semiconductor shares, as calls to slow the pace of AI development — often described as an "AI speed-brake" movement — gained renewed attention on Wall Street.

Nvidia, the bellwether AI chipmaker, fell 3.36%, while other major semiconductor names dropped sharply across the board: Broadcom lost 4.77%, Intel 5.59%, AMD 4.40%, Micron 5.25%, and SK hynix's American depositary receipts 7.60%.

Cybersecurity stocks, by contrast, moved in the opposite direction.

Zscaler surged 16% on Monday, while CrowdStrike and SentinelOne each climbed 14%. Palo Alto Networks rose 13%, and Fortinet and Cloudflare gained 9% and 8%, respectively.

Analysts attributed the rally to growing investor conviction that advances in AI will also expand the threat landscape for cyberattacks.

Market research firm Citrini Research said "it is clear that there is a strong opportunity for most cybersecurity companies in the AI era," predicting that demand for cybersecurity software will surge as AI becomes more pervasive.

Citrini particularly highlighted zero trust network access, or ZTNA, providers — including Cloudflare, Zscaler and Netskope — as standout cybersecurity beneficiaries of the AI era. The firm argued that the proliferation of AI agents will multiply the number of connections that need to be monitored, directly benefiting those companies.

Eddie Gabour, CEO of Key Advisors Wealth Management, told Business Insider that "cybersecurity will be the biggest beneficiary of the AI boom," adding that "the more AI gets adopted, the greater the need for cybersecurity."

The selloff comes as prominent figures in the AI industry have issued a string of warnings that development of cutting-edge AI systems should be slowed, dampening investor sentiment on Wall Street.

Anthropic CEO Dario Amodei urged in a post on his personal blog Saturday (local time) that model development be slowed to allow safety measures to keep pace, warning of the risks of AI misuse.

"Over the past few months I've become convinced that we need to be much more careful to fully address the risks," Amodei wrote. "We need to moderate the pace of capability development so that risk prevention can keep up."

Jacob Coxon, a researcher who had worked on AI model training at Anthropic, also resigned, citing concerns that AI could escape human control.

Writing on X on Sept. 8, Coxon said, "The people building AI genuinely believe this technology could kill all of us within 10 years" and that "no other human activity carries this level of risk." In a subsequent interview with CNN, he warned that "in the not-too-distant future — next year or the year after — if self-recursive development spirals into a vicious cycle, there is a very high probability that we all die. That day is coming soon."