Okta’s 0.70% Drop and 482nd Volume Rank Signal Struggles with AI Risks and Market Pressures

On August 18, 2025, Okta (OKTA) shares fell 0.70% with a trading volume of $0.19 billion, ranking 482nd in daily volume. The stock has declined 27.2% over the past three months, underperforming the broader tech sector and security industry benchmarks. This slide reflects challenges in Okta’s federal business, macroeconomic pressures, and competitive dynamics in identity and access management (IAM).

Okta’s recent research highlights growing risks from AI agents and non-human identities (NHIs). A survey revealed 85% of organizations now view IAM as critical to security, up from 79% in 2024, yet only 10% have mature strategies for managing NHIs. These digital entities pose unique challenges, including short lifespans, reliance on API tokens, and limited traceability. Access control, lifecycle management, and visibility were cited as top pain points, with executives warning that unmonitored AI agents could expose sensitive data or enable attacks. Okta advises treating AI agents with governance akin to human users, emphasizing secure-by-design frameworks and clear ownership.

The company’s partnership with Palo Alto Networks and expanded security protocols, such as Cross App Access, aim to address these risks. Okta’s focus on protecting NHIs aligns with broader industry trends, as 87% of organizations plan to increase identity security investments. However, only 9% of global respondents described themselves as “very prepared” for AI-driven threats, underscoring the sector’s unmet demand for robust governance solutions.

Okta’s FY2026 guidance reflects cautious optimism, with revenue projected to grow 9-10% to $2.85–2.86 billion. While its strong partner ecosystem and liquidity position remain strengths, near-term headwinds include macroeconomic uncertainty and a stretched valuation. Analysts suggest a “Hold” rating, emphasizing long-term growth potential from its AI-focused security portfolio despite current volatility.

A backtest of a strategy buying the top 500 stocks by daily volume and holding for one day from 2022 to 2025 yielded a total profit of $10,720, with steady growth and minor fluctuations due to market dynamics.