Is Okta stock now getting a tailwind? Company boss clears up panic surrounding NVIDIA and other AI titles

• CEO sees two misconceptions among investors
• Don’t worry about software replacement by AI
• Strong figures underpin confidence

Despite the hype surrounding artificial intelligence (AI) surrounding NVIDIA & Co., there is a subdued mood among traditional software stocks on the US market. Many investors fear that generative AI services such as ChatGPT or Gemini could fundamentally devalue the business models of established software companies – a concern that is driving the debate about possible AIStock bubble heated up.

Identity management specialist Okta Inc. defies this skepticism. Its CEO Todd McKinnon vehemently contradicts this market opinion when presenting the latest quarterly balance sheet. He does not see his company as a victim, but rather as a key beneficiary of the AI ​​boom.

Okta boss: Two key misconceptions among investors

According to a MarketWatch article, McKinnon identifies two main reasons for investor reluctance. In his opinion, market participants believe it is possible that AI could “eat up” classic business software and devalue license and subscription models. The Okta CEO sees no danger here, on the contrary: He argues that AI will make specialized applications more productive and valuable, which will prompt companies to invest even larger budgets in these tools. AI opens up new usage scenarios, but does not replace the basic functions.

And McKinnon also contradicts what he believes to be the prevailing market opinion on a second point – namely when it comes to the role of security. The top manager believes that the role of identity security (Identity and Access Management, IAM) as a key infrastructure in the AI ​​age is grossly underestimated. With the so-called “agent revolution”, in which autonomous AI agents independently access data and systems, it will be essential to properly manage human and “machine identities” and to precisely control their access rights. Okta positions itself precisely in this segment: as a security guard for this increasingly complex infrastructure.

Strong numbers despite market conditions

Okta’s latest financial results support McKinnon’s optimistic view. In the third fiscal quarter, the company delivered robust results and significantly exceeded expectations: Revenues increased from $651 million to $724 million, exceeding market expectations of $730.4 million. The company also performed better than hoped in terms of profits. Non-GAAP earnings per share improved from $0.67 to $0.82 – the previous forecast was $0.75 per share.

The company then raised its sales forecast for the full year 2026.

Is the bubble debate spreading to software titles?

The general reluctance towards software stocks is closely linked to the debate about an AI stock bubble. Skeptics warn that valuation metrics for leading AI players are well above historical tech averages. There are fears that returns will not meet the astronomical market expectations. Optimists counter that the leading AI companies have solid balance sheets and significant investments in real infrastructure. They see AI as a structural growth topic.

For Okta, this area of ​​tension has a clear strategic positioning: regardless of which AI platform prevails, every application that interacts with sensitive company data requires identity and access controls like those offered by Okta.

McKinnon’s conclusion for investors: AI does not replace software, but rather increases the complexity and thus the structural need for security solutions. If one agrees with this thesis, the market would currently underestimate the fact that identity security represents a strategic AI infrastructure. Against this background, there is still room for improvement in terms of the growth currently priced in at Okta.

Okta shares will be in positive territory in 2025

So far, investors do not seem to fully share the CEO’s positive assessment of Okta’s business prospects, as a look at the share price shows. So far in 2025, Okta shares have increased by around 15 percent. This means that the share performed roughly like the broader market: the S&P 500 is up 15.62 percent for the year (closing price on December 16, 2025). However, analysts still see significant room for improvement: the average price target is $111.33, which is 26 percent above the current price level.

Editorial team finanzen.net

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