February 7, 2026
Microsoft cybersecurity expansion poses long-term ‘ramifications’ for Palo Alto Networks, Cloudflare, others

Microsoft cybersecurity expansion poses long-term ‘ramifications’ for Palo Alto Networks, Cloudflare, others

Microsoft cybersecurity expansion poses long-term ‘ramifications’ for Palo Alto Networks, Cloudflare, others – MarketWatch

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The Ratings Game

Last Updated: July 13, 2023 at 7:57 a.m. ET First Published: July 12, 2023 at 4:47 p.m. ET

As Microsoft shares finish the day up 1.4%, the average cybersecurity stock sheds 1.4%

Microsoft announced Wednesday that Azure AD will now become “Microsoft Entra ID.”

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[]Cybersecurity stocks fell Wednesday after Microsoft Corp. announced an expansion into network security, and rebranded its Azure Active Directory to reflect that move, which could haunt pure-play security vendors in the long term.

[]In a blog post Tuesday, Microsoft MSFT, +0.90% announced that Azure AD will now become “Microsoft Entra ID,” as the service focuses on zero-trust ID with Entra Private Access, and an identity-centric secure web gateway with Entra Internet Access, both of which are in preview.

[]Jefferies analyst Brent Thill followed that with a note stating that Microsoft “has now clearly entered the network space with potential longer-term ramifications to vendors” such as Cloudflare Inc. NET, +4.59%, Fortinet Inc. FTNT, +0.49%, Check Point Software Technologies Ltd. CHKP, +1.36%, Palo Alto Networks Inc. PANW, +3.38% and Zscaler Inc. ZS, +4.28%.

[]Read: Microsoft is cutting more jobs, after laying off 10,000 earlier this year

[]While shares of Microsoft finished Wednesday’s session up 1.4% at $337.20, shares of Cloudflare dropped 5.5% to finish at $64.23, Fortinet shares fell 2% to $76.72, Check Point shares fell 1.3% to close at $126.19,Palo Alto Networks shares dropped 7% to close at $232.64 and Zscaler shares fell 6.6% to close at $137.68.

[]While not cited in Thill’s note, CrowdStrike Holdings Inc. CRWD, +3.61% shares fell 3.1% to close Wednesday at $146.13, and the ETFMG Prime Cyber Security ETF HACK, +1.56% finished down 1.4%.

[]Also read: Microsoft to work with U.K. regulators after U.S. judge clears path to Activision Blizzard acquisition

[]Meanwhile, the S&P 500 index SPX, +0.51% rose 0.7%, the tech-heavy Nasdaq Composite COMP, +0.90% gained 1.2%, and the Dow Jones Industrials Average DJIA, +0.27%, of which Microsoft is a component, closed up 0.3%.

[]By entering the space, Microsoft expanded its cybersecurity total addressable market to upwards of $20 billion in 2022 from upwards of $15 billion in 2021, Thill said.

EV sales stall as, aside from Tesla and BYD, there’s a ‘step back from euphoria’

[]For the first time in recent years, sales of electric vehicles didn’t grow as fast as the market expected, a “step back from EV euphoria” for companies that are not Tesla or BYD, Barclays analysts said.

[]Wallace Witkowski came to MarketWatch from the Associated Press in New York, where he covered the business of Big Pharma, after covering FDA regulation of many of the same companies, as well as medical devices, in the Washington, D.C., area. Based in San Francisco, his current focus is on the more exciting world of semiconductors, videogames and cybersecurity, when he’s not churning out earnings coverage. Follow him on Twitter at: @wmwitkowski.

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