For Okta CEO Todd McKinnon, the company’s first quarter results could not have gone any better. The firm, which runs a user authentication platform for tens of thousands of institutions, beat Wall Street’s revenue and earnings estimates results in late May. Most important was one of its reasons for the success: the company said it was seeing increasing demand for identity tools from the rise of AI agents.
Investors took note. The stock gained 8% that day—and has continued to surge since, up about 50% through July. That’s enough to make McKinnon a billionaire, according to calculations by Forbes. It’s not his first time: McKinnon was a billionaire in 2021 and 2022 thanks to a surge in software stocks during the time, but saw his fortune tumble as part of a broad selloff that erased billions of dollars from technology valuations. Now another boom, AI, has thrust him back into the three-comma club.
McKinnon was born in Fremont, a small town just outside San Jose, California where his father worked as a human resources executive. Because his family did not own a computer, he spent a lot of time at a friend’s place whose data scientist father owned a PC, honing his skills. In 1993, he graduated from Brigham Young University with a business degree, then California Polytechnic State in 1995 with a Master’s in computer science as the dot-com era began. After spending close to a decade at software company PeopleSoft, he joined Marc Benioff’s Salesforce to lead engineering and eventually became one of the executives at the company. He decided to strike out on his own in 2009, founding Okta (then named Saasure). When he left, he created a PowerPoint presentation for his wife explaining why the risk was worth it. It took years but it finally paid off with a 2017 IPO; shares ran up more than 400% over its first three years.
But it was the Covid-19 pandemic that really made the stock skyrocket, as companies shut down their offices and millions of employees worked remotely from home. San Francisco-based Okta quickly emerged as a leader in identity and access management, offering services like multi-factor authentication and access control to thousands of clients that helped employees access their work apps from anywhere, including giants like Apple and Amazon. By August McKinnon, who lives in San Francisco, was a billionaire.
Yet the stock boom proved to be temporary. Beginning in late 2021, investors aggressively sold off software firms, citing overspending and rising interest rates. Okta faced additional scrutiny, too, as the firm grappled with criticism over a $6.5 billion acquisition of rival Auth0 and fallout from a massive hack that stole the data of some of the company’s clients and employees. The stock dropped more than 70% from its 2021 peak to the start of 2023.
AI’s rise played a central role in reversing McKinnon’s fortunes. Investors’ fears of Anthropic’s Mythos model, which was launched in April, upending all cybersecurity software businesses, have since subsided. Now investors seem to be differentiating among these companies, standing pat or even growing bullish about segments of the software industry that might continue to be relevant and cannot be “vibecoded away,” according to Ellie Kearney, a cybersecurity analyst at London-based Arete Research. Okta is one of the biggest beneficiaries.
“We definitely see cybersecurity as defensible against agentic AI displacement,” says Kearney. “When we had the move from on-prem[ises servers] to cloud, first came cloud investment and then there was a lag before cyber investment. This time around, because of things like Mythos and [Anthropic’s] Project Glass Wing, we think that the lag for cybersecurity investment will be much shorter and more coincidental.“
Whether people are using tools themselves or making AI assistants do things for them, companies still need to make sure only the right people and the right AI agents can access sensitive information. As more and more businesses adopt AI agents, keeping track of who has what access is becoming more and more complicated. That has created more demand for companies like Okta, which provides security tools that can verify identities, control access to sensitive systems, and help organizations keep their information safe. According to Okta, more than 91% of organizations are already using AI in their workflows—many investors believe the service will become even more important as AI agents become a common part of the workforce.
“Okta is one of the leaders within the identity and access management market,” says Shaul Eyal, managing director of equity research at TD Cowen. “This is probably one of the most mission critical categories of the broader cybersecurity arena.”
While the stock remains below all time highs, the recovery has restored more than $4 billion in market capitalization for Okta, and rebuilt confidence among investors. In its Q1 results earlier this year, where it reported revenues of $765 million, up 11.2% year-over-year, several analysts raised their price targets for Okta, including the likes of Goldman Sachs, JPMorgan and Morgan Stanley.
And while some investors were worried about Okta’s lower-than-expected outlook for 2026, McKinnon had a simple message during a recent TV appearance: “In our space, we are the clear leader.”
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