JFrog (FROG) Stock Drops 20% After Anthropic’s Claude Code Security Launch

TLDR

• JFrog (FROG) dropped over 20% after Anthropic announced Claude Code Security, raising fears about AI disrupting traditional security tools.
• Raymond James kept its Outperform rating, calling the sell-off “excessive” and a potential buying opportunity.
• JFrog beat Q4 estimates — EPS of $0.22 vs $0.19 expected, revenue of $145.31M vs $138.09M, up 25.2% year-over-year.
• 19 analysts give FROG a consensus “Moderate Buy” with an average 12-month price target of $65.94.
• Insiders sold roughly $24.97M worth of stock in the last 90 days, while the stock now trades around $37.75.

JFrog Ltd. (FROG) took a hard hit last week, falling more than 20% in a single session after Anthropic unveiled Claude Code Security — an AI-native tool that analyses vulnerabilities directly at the source-code layer.

JFrog Ltd., FROG

Investors didn’t wait around to see how it plays out. The sell-off was swift and sharp.

The concern is straightforward: if AI can catch security issues during the coding process, do enterprises still need downstream package-level tools like JFrog’s Curation product? That question spooked the market.

There’s also a broader worry about perception. If companies start viewing AI-native security as “good enough,” they may slow adoption of JFrog’s incremental security modules. And longer-term, there’s fear Anthropic could expand into artifact scanning — territory that sits squarely in JFrog’s core business.

Despite all that, not everyone is running for the exit.

Raymond James maintained its Outperform rating on FROG, calling the sell-off “excessive.” The firm argues that the market is getting ahead of itself by extrapolating far beyond what Claude Code Security actually does right now.

Their case: JFrog operates at a different layer of the software stack — the artifact and package layer — where it provides policy enforcement and governance that large enterprises still need, regardless of what’s happening at the code review stage.

Q4 Results Were Actually Strong

It’s easy to forget, given the noise, that JFrog just posted a solid quarter.

The company reported Q4 EPS of $0.22, beating the consensus estimate of $0.19. Revenue came in at $145.31 million, ahead of the $138.09 million analysts expected — and up 25.2% compared to the same quarter last year.

For context, JFrog earned $0.19 EPS in Q4 of the prior year, so the year-over-year EPS improvement is real.

Looking ahead, the company set FY2026 EPS guidance at $0.88–$0.92 and Q1 2026 guidance at $0.20–$0.22 EPS. Full-year 2026 revenue is projected at $626 million by analysts, with Non-GAAP EPS of $0.90.

What Analysts Are Saying

The broader analyst community still leans positive. Of 19 brokerages covering the stock, 15 have a buy rating, three have a hold, and one has a sell. The average 12-month price target sits at $65.94 — well above the current trading price of $37.75.

Canaccord Genuity trimmed its target from $75 to $66 but kept its buy rating. TD Cowen went the other direction, raising its target from $75 to $80. UBS set a $60 target, while Cantor Fitzgerald reiterated an overweight rating with an $80 target. Wall Street Zen upgraded the stock from hold to buy on February 15th.

Raymond James points to JFrog’s security pipeline as a reason for confidence. Security accounted for 16% of Remaining Performance Obligations at the end of FY25, and analysts estimate that supports at least 50% year-over-year Security ARR growth for the current year.

On the insider front, executives and directors sold approximately $24.97 million worth of stock over the last 90 days. The stock currently trades at $37.75, within a 52-week range of $27.00 to $70.43.

Institutional investors hold 85.02% of FROG, with several new small positions initiated in Q4.

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