Wall Street is starting to size up a new cybersecurity opportunity: keeping track of the software “workers” that companies are increasingly letting loose on their networks. Morgan Stanley analysts say this so-called “agentic identity” market could be worth more than $60 billion, and they’ve named three companies they think are positioned to benefit early: Palo Alto Networks, Okta, and SailPoint.
The idea is simple but potentially huge. For years, identity security has been about managing human employees—making sure the right people can access the right systems, and that nobody gets in who shouldn’t. But now, companies are deploying autonomous AI agents that can draft code, move data between systems, and carry out tasks without a human clicking every button. Each of those agents needs its own set of permissions, and those permissions need to be tightly controlled and constantly updated.
Why agentic identity is different
Traditional identity tools were built for a world where users were people. People have names, managers, and job roles. They log in, do their work, and log out. AI agents, by contrast, are software that can act on their own, often across multiple systems at once. That creates a new set of security headaches: How do you know what an agent is allowed to do? How do you stop it from accessing something it shouldn’t? And how do you keep track of all the agents running across a large enterprise?
Morgan Stanley’s analysts argue that this is a problem companies will have to solve, and that the solution will require a new generation of identity security tools. That’s where Palo Alto Networks, Okta, and SailPoint come in. Palo Alto is known for its firewalls and broader cybersecurity platform, Okta for managing employee and customer identities, and SailPoint for governing access to enterprise software. All three are already established players in the identity space, which could give them a head start as the market shifts.
The $60 billion figure is a big number, but it’s also a projection. It reflects the idea that as more companies adopt AI agents, they’ll need to spend more on securing them. That spending could come from existing cybersecurity budgets or from new money set aside specifically for AI-related risks.
What it means for investors
For everyday investors, the takeaway isn’t that you should rush out and buy these three stocks. It’s that the AI boom isn’t just about the companies building the models—it’s also about the companies that help other businesses use AI safely. That’s a theme that could support demand for cybersecurity and identity management services for years.
It also highlights a broader shift in how companies think about security. As AI agents take on more responsibilities, the old model of “one user, one password” may no longer be enough. Instead, companies will need systems that can manage thousands of machine identities, each with its own set of rules and limits.
That’s a problem that’s only going to grow as AI adoption accelerates. And it’s why analysts are starting to pay attention to the companies that provide the “plumbing” for AI—the tools that make it safe and reliable.
Of course, projections like this come with plenty of uncertainty. The market for agentic identity is still young, and it’s not clear which companies will ultimately dominate. But for investors, it’s a reminder that the AI story has many layers, and that some of the biggest opportunities may be in the less glamorous corners of the tech world.
For more on how AI is reshaping markets, check out our coverage of Google's AI chip deal with Marvell and the Bank of England's research on AI and inflation.
As always, do your own research and consider how any new technology trend fits into your overall investment strategy. The key is to understand the risks and opportunities, not to chase the latest headline.
