After one of the sharpest non-recession drawdowns in decades, cybersecurity stocks may finally be getting something they've lacked for months: insider conviction. According to JPMorgan analyst Brian Essex, the clearest signal came from Nikesh Arora. The Palo Alto Networks, Inc. (NASDAQ:PANW) CEO stepped into the open market with a ~$10 million stock purchase — a move that stands out in a sector dominated by selling.

A Rare Buy In A Sea Of Selling

Essex notes the broader software complex has been under pressure, with the iShares Expanded Tech (BATS:IGV) down sharply year-to-date. AI disruption fears — particularly around long-term software demand — have driven multiple compression across the space.

Insider activity reflects that stress.

His coverage highlights that names like CrowdStrike Holdings, Inc. (NASDAQ:CRWD) and JFrog Ltd. (NASDAQ:FROG) have seen heavy insider selling, with transactions running into tens — and in some cases hundreds — of millions of dollars.

Against that backdrop, Arora's buy isn't just notable. It's contrarian.

Early Signs Of A Shift

Still, Essex points to early signs of improving insider support.

Smaller, but still meaningful insider buying has emerged in names like Varonis Systems, Inc. (NASDAQ:VRNS), Tenable Holdings, Inc. (NASDAQ:TENB) and Elastic N.V. (NYSE:ESTC) — suggesting early signs of returning insider support across cybersecurity.

The common thread, according to Essex: these are companies seen as AI-resilient — or outright beneficiaries — as expanding attack surfaces and agentic workflows create new security demands.

What Insiders Might Be Seeing

Essex emphasizes that insider transactions matter because executives have real-time visibility into demand, customer spending, and platform traction.

That's what makes a $10 million open-market buy particularly notable.

Because while markets remain focused on AI disruption, insiders — as Essex frames it — may be signaling confidence in AI resilience and future growth.

Cybersecurity stocks have been repriced due to fear. If insider buying is any signal, conviction may be starting to catch up.

Photo: PJ McDonnell via Shutterstock