OKTA's AI Security Push Gains Momentum Against CRWD & MSFT

Okta OKTA is benefiting from growing enterprise demand for Artificial Intelligence (AI) security and an expanding identity-security portfolio. The company is extending its platform beyond employees and customers to AI agents and other non-human identities as enterprises rapidly deploy agentic applications. Okta’s offerings include Okta for AI Agents, Auth0 for AI Agents, Identity Threat Protection, Identity Security Posture Management, Privileged Access and Fine-Grained Authorization. These capabilities strengthen Okta’s position against broader security competitors, including CrowdStrike CRWD and Microsoft MSFT. 

New-product adoption is already supporting bookings and customer spending. In the second quarter of fiscal 2027, newer products accounted for roughly 30% of bookings, led by Okta Identity Governance. Deals incorporating new products generated an average annual contract value (ACV) growth of about 40%. Okta closed dozens of AI-agent deals, including several million-dollar-plus transactions. OKTA noted that AI-related deal sizes remain above the company-wide average, although AI contributions are still too small to materially affect overall revenues. 

Rapid AI-agent proliferation could support further demand. In one customer evaluation, Okta initially detected roughly 50 Claude-agent instances, but the number increased to around 1,500 within a few weeks. Such rapid proliferation increases enterprises’ need to discover, govern and secure agents. Okta has already secured a multimillion-dollar AI Agents deal with a Fortune 50 healthcare company, while a global consulting firm selected the platform after considering an internal build. One of the world’s largest asset managers selected Okta to govern thousands of agents from multiple vendors, highlighting the appeal of its vendor-neutral architecture. 

Okta is strengthening its capabilities through acquisitions and public-sector expansion. The Permiso acquisition adds a cloud-native platform that detects threats across human, non-human and agentic identities. The company said Permiso brings around 400 native risk detections compared with roughly 90 in Okta’s existing Identity Threat Protection offering, potentially strengthening post-authentication monitoring and runtime security. Okta for AI Agents-Core extends AI-agent governance into FedRAMP and Health Insurance Portability and Accountability Act (HIPAA) environments, while Impact Level 5 authorization expands opportunities with the U.S. Department of Defense as agencies work toward the 2027 Zero Trust mandate. Public sector currently represents less than 10% of Okta’s business, leaving room for further growth. 

Okta’s ecosystem provides another advantage. Anthropic named Okta the first identity provider supporting Enterprise Managed Auth for Model Context Protocol connectors, while the company has expanded relationships with Amazon Web Services, Cisco, OpenAI, Databricks and Snowflake and added more than 25 Cross-App Access integrations. These partnerships should help enterprises secure agents across heterogeneous applications and clouds while supporting cross-selling and broader platform adoption.

OKTA Faces Tough Competition

Microsoft and CrowdStrike are intensifying competitive pressure. Microsoft’s E7 suite combines Copilot, E5, Entra and Agent 365, attracting hundreds of enterprise customers and millions of seats within two months, including a 400,000-employee deployment at EY. Agent 365 has nearly 40 million agents registered, while Purview has audited more than 50 billion Copilot interactions. Project Perception further combines Entra, Defender, network and application-security signals to automate attack simulation, investigation and remediation. 

CrowdStrike reported in the second quarter of fiscal 2027 that AI Detection and Response (AIDR) annual recurring revenues (ARR) nearly tripled sequentially, identity ARR rose 34% to more than $585 million and Falcon Shield ARR surged more than 185%. Privileged-account security ARR increased more than 35-fold, while Signal provides granular access controls for human and non-human identities. Falcon Flex also generates more than 40% average ARR uplift when customers migrate from standard subscriptions, strengthening CrowdStrike’s ability to bundle endpoint, cloud, identity, SIEM and AI security into a broader platform offering.

OKTA’s Share Price Performance, Valuation & Estimates

Shares of Okta have appreciated 92.3% year to date, outperforming the broader Zacks Computer and Technology sector’s 17.1% growth.

OKTA Stock’s Price Performance

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OKTA stock is trading at a premium, with a forward 12-month price-to-earnings ratio of 40.46X compared with the broader sector’s 20.76X. Okta has a Value Score of F.

OKTA’s Valuation

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The Zacks Consensus Estimate for Okta’s earnings is currently pegged at 93 cents per share, unchanged over the past 30 days, suggesting 13.41% growth.

Okta, Inc. Price and Consensus

Okta, Inc. price-consensus-chart | Okta, Inc. Quote

Okta currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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