CQ2 Security Preview and Reseller Survey – Round 1: Rebound Creates Shakier Setup Into On-Cycle Earnings

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CQ2 Security Preview and Reseller Survey – Round 1: Rebound Creates Shakier Setup Into On-Cycle Earnings

Idea

July 21, 2026 05:01 AM GMT

Morgan Stanley & Co. LLCMCybersecurity | North America Meta A Marshall

Equity Analyst

CQ2 Security Preview and Meta.Marshall@morganstanley.comJonathan Eisenson +1 212 761-0430

Research Associate

Jonathan.Eisenson@morganstanley.com +1 212 761-2808

Reseller Survey – Round 1: Ryan Lountzis

Ryan.Lountzis@morganstanley.com +1 212 761-3189

Rebound Creates Shakier Setup Abhishek S Murli

Abhishek.S.Murli@morganstanley.com +1 212 761-7388

Into On-Cycle Earnings

Software

North America

After the 25% run in cyber over the L1M, and near doubling of Industry View Attractive

VM names, we see a healthy demand environment, but not one What’s Changed

that has improved to the extent of valuations. See strongest CrowdStrike(CRWD.O) Holdings Inc From To

print potential from FTNT, VRNS, most cautious CHKP, QLYS, Price Target $172.00 $227.00

Top Pick CRWD.O PANW.O

RPD as unlikely to see material inflection.

Palo Alto Networks Inc

(PANW.O) From To

Key Takeaways Price Target $320.00 $387.00

While cyber names are up ~25% over the last month, outside of CHKP, most of

the on-cycle names are up 80%+ as concerns around AI headwinds have lifted. Rapid7 Inc (RPD.O) From To

Rating Equal-weight Underweight

AI preparedness investments / hardware pullforward likely to continue in near

Fortinet Inc. (FTNT.O) From To

term, leading us to upgrade FTNT to EW heading into the print. Rating Underweight Equal-weight

While VM names got too cheap, we don't see an inflection this quarter, making us Price Target $80.00 $133.00

more cautious TENB, QLYS, RPD heading into the print (downgraded RPD to Varonis Systems, Inc.

(VRNS.O) From To

UW). Price Target $31.00 $43.00