'We are at the cusp of a generation shift': Boolani on IT infrastructure

Key Concepts

• Palo Alto Networks: Cybersecurity company benefiting from increasing budgets driven by AI adoption and expanding attack surfaces.
• Rubric: Backup and recovery/cyber resilience solutions provider, crucial for ransomware protection and data security in the age of AI.
• Atlassian: Collaboration platform for developers and IT teams, currently undervalued due to fears surrounding AI coding tools.
• AI & Cybersecurity: The central theme linking all three picks – AI is driving both increased cybersecurity budgets and creating new vulnerabilities.
• Generational Shift in IT Infrastructure: The need to modernize IT stacks to support AI adoption, creating opportunities for infrastructure software companies.

Cybersecurity & Software Investment Opportunities – Fatima Bulani (City)

This discussion focuses on three software companies – Palo Alto Networks, Rubric, and Atlassian – identified as strong investment opportunities for 2026 by Fatima Bulani, Managing Director and Co-Head of Software Equity Research at City. The overarching theme is the impact of Artificial Intelligence (AI) on the cybersecurity landscape and the broader IT infrastructure.

Palo Alto Networks – Navigating Headwinds with AI-Driven Growth

Palo Alto Networks, despite past stock performance fluctuations, is positioned for growth due to increasing cybersecurity budgets. Bulani emphasizes that as long as cybersecurity budgets continue to rise, the company is well-placed to succeed. A key driver of this increase is the adoption of AI and Generative AI. Organizations are actively pursuing large-scale AI projects but recognize the need to secure these new frameworks, protocols, and applications.

Specifically, the increasing impetus around AI is directly translating into budgetary increases for cybersecurity. Bulani notes that the adoption of AI also inherently expands the “attack surface” – the potential avenues for malicious actors to exploit vulnerabilities – creating a greater need for comprehensive security solutions. Palo Alto Networks offers a “de facto comprehensive portfolio” to help organizations navigate these challenges and monetize security in the process.

Rubric – Essential Cyber Resilience in the Age of Ransomware

Rubric provides backup and recovery solutions, alongside crucial cyber resilience capabilities. Its importance stems from the increasing frequency and severity of disruptive events, including natural disasters, accidental system failures, and, critically, ransomware attacks. Ransomware, where data is held hostage until a ransom is paid, has made Rubric’s services increasingly vital.

The growth of data volumes, coupled with the increased vulnerabilities introduced by AI adoption, further amplifies the need for robust backup and recovery solutions. Bulani highlights that Rubric is becoming “so critical so consequential” in this evolving landscape. She frames Palo Alto and Rubric as the “plumbing and infrastructure software” necessary to securely support the coming wave of AI adoption.

Atlassian – Undervalued Collaboration Platform Poised for AI-Driven Productivity

Atlassian is a collaboration platform targeting developers, IT staff, and business teams. Bulani believes the company is currently undervalued due to market fears that AI coding tools will negatively impact its revenue model, which is based on per-seat (headcount) pricing.

However, Bulani argues that these fears are misplaced. She posits that increased coding activity, even with the assistance of AI tools, will ultimately lead to greater productivity gains in software development. This increased productivity will, in turn, drive demand for Atlassian’s tools for code management, debugging, and collaboration. She believes Atlassian’s core competence – enabling collaboration around building applications – will be enhanced by the rise of AI, not diminished.

Generational Shift & Interconnectedness

Bulani repeatedly emphasizes that the market is on the “cusp of a generational shift” in how organizations approach their IT infrastructure. The widespread adoption of AI necessitates a modernization of existing systems, creating significant opportunities for companies like Palo Alto, Rubric, and Atlassian. These three companies are interconnected in that they address different facets of this modernization – security (Palo Alto & Rubric) and collaboration (Atlassian) – all driven by the overarching trend of AI integration.

Notable Quote:

“We are at the cusp of a generational shift in the way the average organization is going to think about their IT stack and their IT infrastructure…because they’re all getting up and ready to do AI.” – Fatima Bulani

Technical Terms:

• Attack Surface: The sum of all potential entry points for attackers to exploit vulnerabilities in a system.
• Ransomware: A type of malicious software that encrypts a victim's files and demands a ransom payment to restore access.
• IT Stack: The combination of hardware and software components used by an organization to run its IT infrastructure.
• Monetization Overhang: A concern that a change in technology or market conditions will negatively impact a company’s revenue model.

Conclusion:

The core takeaway is that AI is a powerful catalyst for growth in the cybersecurity and software sectors. Palo Alto Networks, Rubric, and Atlassian are all well-positioned to benefit from this trend, either by providing essential security solutions, enabling data resilience, or facilitating collaboration in the new era of AI-driven software development. Bulani’s analysis suggests that current market valuations do not fully reflect the potential of these companies, making them attractive investment opportunities for 2026.