tech
January 14, 2026
China's ban on cybersecurity software roils three of our stocks
Chinese authorities have told domestic companies to stop using software from a handful of U.S. and Israeli firms.
TL;DR
- China has instructed domestic companies to stop using cybersecurity software from U.S. and Israeli firms, including Palo Alto Networks, CrowdStrike, and Broadcom's VMware, due to national security concerns.
- This ban occurs amidst U.S. restrictions on AI chip sales to China, leading to retaliatory measures from China and impacting the semiconductor industry.
- Palo Alto Networks has limited exposure to China (2.2% of revenue), with strong growth in other regions, leading to stock recovery.
- CrowdStrike stated it does not sell products in China, making the ban's financial impact immaterial.
- Broadcom has 17% revenue exposure in China, but the U.S. remains its largest market.
- Analysts maintain positive ratings and price targets for Palo Alto Networks and CrowdStrike, while cautiously evaluating Broadcom's valuation and AI-related growth.
- Jim Cramer's Charitable Trust holds positions in Palo Alto Networks, Broadcom, and Nvidia.
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