Key Takeaways
- Loop Capital suggests Okta shares could rise significantly, initiating coverage with a buy rating.
- The growing use of generative AI is increasing the need for robust identity security.
- Okta is seen as well-positioned due to its technology (Auth0) and key customer relationships (OpenAI).
- Analysts believe Okta could become a major player in tech as AI security needs grow.
Investment firm Loop Capital sees a bright future for identity security company Okta, thanks largely to the boom in artificial intelligence.
According to a report detailed by CNBC, Loop Capital has started covering Okta with a buy rating, predicting its stock could jump about 24%.
The reasoning? The identity security market is hitting a turning point. As companies adopt generative AI, they face new challenges in securing who—and what—has access to data and systems.
This includes managing access not just for employees and customers, but also for non-human users like AI agents and software connections (APIs).
Loop Capital analyst Yun Kim believes Okta is “perhaps the best-positioned vendor” in this evolving market, highlighting its strategic assets like the Auth0 platform and its relationship with AI leader OpenAI.
This optimistic view comes after a strong run for Okta’s stock, which has surged significantly this year, outperforming the broader market.
The analyst feels Okta has moved past previous hurdles related to its user base and security incidents, setting the stage for potentially faster growth later this year, even with economic uncertainty.
Kim suggests the market might be just one major AI-related security breach away from a huge spike in demand for solutions like Okta’s, particularly for securing those non-human AI identities.
Comparing Okta to security giant Palo Alto Networks, Kim envisions Okta becoming the go-to “one-stop shop” for all identity security needs.
Looking ahead, Loop Capital sees strong potential for Okta to grow into “one of tech’s bellwethers” over the next few years.
This bullish sentiment is shared by many on Wall Street, with a majority of analysts covering Okta rating the stock as a buy or strong buy, according to LSEG data.
