If you’ve spent any time around cybersecurity professionals, you’ve heard some version of this warning: it’s not a matter of if, but when. For years, that felt like industry boilerplate. Then Anthropic’s Mythos arrived, and suddenly the urgency feels different.
On June 3, CNBC’s Jim Cramer posted on X what amounted to a two-stock thesis in a single sentence.
Both Cisco and Palo Alto came in hot, but I think they can run further,”
“Mythos is such a game changer for these companies,” Cramer wrote.
Mythos — Anthropic’s cybersecurity-focused AI model, currently being accessed by select technology companies through Project Glasswing, has demonstrated an unprecedented ability to autonomously find and chain software vulnerabilities.
The implications are significant. What used to be a standard business expense is rapidly becoming an absolute operational priority.
Both Cisco (CSCO) and Palo Alto Networks (PANW) just reported strong earnings. Cramer thinks that’s only the beginning.
Also Read: Palo Alto Networks Inc. Latest News
How Mythos is triggering a cybersecurity arms race, and who benefits
The Mythos story starts with a number that stopped Palo Alto’s security team cold. Using early access to the model, Palo Alto scanned 130 of its own products in a single month and found 75 vulnerabilities that had survived decades of human testing, according to Palo Alto.
That’s not a data point. That’s a paradigm shift. Palo Alto CEO Nikesh Arora framed it plainly in a company statement after Q3 earnings.
“The latest advancements at the AI frontier have increased the level of urgency around cybersecurity,” he said, “and redefined the shape of the industry for the coming years.”
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The arms race dynamic works in both directions. Mythos can find vulnerabilities, which means bad actors who eventually gain access to similar tools will use them offensively.
That forces enterprises to respond. And the two companies best positioned to capture that defensive spending are the same two Cramer just flagged.
Palo Alto reportedly burned through more than $1 million in API tokens in just three weeks of Mythos testing, according to BigGo Finance. That figure tells you something important about the scale of computing these tools require, and what enterprise cybersecurity budgets will need to absorb going forward.
Palo Alto Networks: record ARR growth and a platform built for what’s next
Palo Alto’s Q3 fiscal 2026 results, reported June 2, showed a business accelerating in exactly the areas that matter most for the Mythos thesis.
Key Q3 highlights, according to a company statement:
- Total revenue: $3.0 billion, up 31% year-over-year (YoY)
- Next-Generation Security (NGS) ARR: $8.1 billion, up 60% YoY
- Remaining performance obligation: $18.4 billion, up 36% YoY
- Non-GAAP EPS: $0.85, up from $0.80 in Q3 fiscal 2025
- Adjusted free cash flow: $910 million, up from $578 million YoY
- Trailing 12-month adjusted free cash flow margin: 38.5%, up 430 basis points YoY
Sources: Palo Alto Networks Fiscal Third Quarter 2026 Financial Results
NGS ARR — the metric that best captures Palo Alto’s transition to a platform model — grew 60% and is already tracking toward the company’s full-year target.
For Q4 fiscal 2026, management guided NGS ARR of $8.90 billion to $8.95 billion and total revenue of $3.345 billion to $3.355 billion, representing 32% YoY growth, according to a Palo Alto statement.
For the full fiscal year 2026, Palo Alto expects total revenue of $11.415 billion to $11.425 billion, up 24% YoY, with an adjusted free cash flow margin of 37.5% and a path to 40% by fiscal 2028, according to the same statement.
PANW shares were up 52.24% year-to-date and 42.26% over the past year, according to Yahoo Finance data as of June 3, 2026. The S&P 500 returned 10.35% and 26.52% over those same periods.
Cisco: AI networking demand meets a new cybersecurity imperative
Cisco’s angle on Mythos is different from Palo Alto’s, and equally compelling. Where Palo Alto is playing offense with vulnerability detection, Cisco is building the defensive infrastructure layer underneath everything else.
The company recently launched Live Protect. That’s a platform that deploys virtual shields against Mythos-class vulnerabilities instantly, without requiring network systems to go offline. That matters because the traditional patching process requires downtime. Live Protect eliminates that tradeoff.
Cisco also unveiled its Cloud Control suite, enabling enterprise clients to manage and secure large fleets of AI agents across international networks.
The earnings backdrop supports Cramer’s optimism. In Q3 fiscal 2026, Cisco posted record revenue of $15.8 billion, up 12% YoY. Non-GAAP EPS came in at $1.06, up 10% YoY.
AI infrastructure orders for the full fiscal year were raised to $9 billion from an original target of $5 billion, according to Cisco’s statement.
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Networking product orders also accelerated to more than 50% YoY growth in Q3. Data center switching orders were up more than 40% YoY.
As enterprises deploy AI agents to respond to Mythos-class threats, network traffic scales dramatically — and Cisco’s hardware handles that surge.
For Q4, Cisco guided revenue of $16.7 billion to $16.9 billion, with non-GAAP EPS of $1.16 to $1.18, according to Cisco’s statement. CSCO shares were up 66% year-to-date and more than 101% over the past year as of June 3, 2026, according to Yahoo Finance data.
Two numbers to watch as Mythos reshapes enterprise tech spending
My review of the data surfaces two specific metrics worth tracking as this story develops.
For Cisco: hardware pricing power. The rush to upgrade switches and backplanes for AI networking creates short-term pricing leverage.
Also Read: Cisco Systems Inc. Latest News
Whether Cisco can sustain premium margins as competition intensifies will determine how much of the revenue surge drops to the bottom line.
For Palo Alto: the gross margin impact of Mythos compute costs. Burning $1 million in API tokens in three weeks is a proof-of-concept figure. At enterprise scale, those costs grow significantly.
The question is whether customer price increases and NGS ARR growth outpace the compute expense enough to protect margins heading into fiscal 2027.
Cramer’s thesis is that both stocks came in hot, but the catalyst that’s driving them is still in its early innings. Based on what both companies just reported, that argument is hard to dismiss.
