Fox Business alert. Aside from energy and utility stocks, if you're hunting for a sector seeing gains, U.S. defense and aerospace names are bucking the broader sell-off. They are in the green this session, pushing through pretty much a sea of red. You can see with the majors here, we've got the Dow Jones Industrials down 244, the Nasdaq down 576.
Now on the flip side, cybersecurity stocks are pretty messy here at this hour after a hacker vulnerability involving a Palo Alto Networks firewall platform was added to the government's list of known exploited flaws. Palo Alto shares are now down pretty dramatically for the week — try 17% — just at this session down 7%.
This amid another major cybersecurity warning, and this could have a significant blast radius. Google's Mandiant warning organizations should prepare for a potential cyber hack after suspected Chinese hackers exploited a serious flaw in BeyondTrust. That software that's used by more than 20,000 customers worldwide, including 75 of the Fortune 100. BeyondTrust gives I.T. teams trusted remote access to computers, servers, and other systems so they can fix problems from anywhere.
Founder and now CEO Kevin Mandia joins me in a Fox Business exclusive. Kevin, this is like a pile-on the last couple of hours, with the Palo Alto Networks situation and, of course, what's going on here. And can you just speak at least to the BeyondTrust part of this?
Well, I can speak to both. At the end of the day, I've been a public company CEO, had software, I was breached back in 2020 when I was the CEO of FireEye, and cybersecurity has never been more important than right now. So if you see volatility in the market, cybersecurity is something every organization needs to get right, every home and vendor needs to get right, and we're going through a shift change right now with tools like A.I. on offense, quite frankly, gives the offense an advantage. So I think you'll see more news like this, Liz, where you see companies like BeyondTrust, companies like PAN, there's other companies that will have their day.
It's because it's really, really hard to make perfect code, and then you have modern nations leveraging real intelligence and frontier models to make some of these things possible. So this is not the last thing you'll hear of this, but it doesn't bother me that the stocks go down today. Cybersecurity is going up to the right in importance every day as our daily lives rely on it.
It's good to get the 30,000-foot view. I agree there's huge demand, especially in light of what's happening with certainly BeyondTrust. I have to ask because BeyondTrust — this could be an incredibly serious hack, in that the attackers can come in, they can grab credentials of employees, they can also assume control of the host and cause total mayhem. They deal with a lot of important companies here — 75 of the Fortune 100 — and if I am one of those companies, what is the first thing that I should be doing?
Right away they know about it. They are starting to get as much information as they can to countermeasure. How do we detect and respond and prevent? Most of them go straight to the remediation guidelines that have been published and start working on how do we do the traps that we need to, to make sure we don't have a blast radius from this one. Here is the thing: it's public knowledge now. Everybody is aware of it. Everybody can take appropriate safeguards to this breach. It's not like it's been going on for a year and nobody knew about it. So the best we can do today in cybersecurity is when somebody gets — I call it they had the needle and punctured the balloon. It's going to happen somewhere. At least while responding to it in sync now.
At Armadin, you are working also, but way more offensive versus playing defensive. You're not just sort of patching holes that you find, but rather you're identifying the vulnerabilities and sending out swarms of agents to weave and stitch together and do what?
Well, when A.I. comes to the forefront — and it already is when you look at cybersecurity with the models that already exist — you have the ability to operate at a speed, a scale, and ultimately creativity and effectiveness that humans couldn't do before. So Armadin believes generically in cybersecurity as anti-virus is today, Liz, every organization is going to have on offense the ability to have the good guys on offense, actively finding if there's any exploitable risk, training the good guys' A.I. on defense. So you'll have A.I. on offense, built by the good guys, actively informing A.I. and training on defense, built by the good guys, to create a force field. And it has to exist because we can't have humans in the loop on security. It's just too fast now in the cyber world.
