Okta's (OKTA) opportunity in agentic artificial intelligence has the potential for upside in H2 of fiscal 2027 as early traction continues to be "encouraging," RBC Capital Markets said in a Thursday note.

The company posted a "strong" quarter, with fiscal 2027 guidance increased across the board, sub revenue and current Remaining Performance Obligations beating consensus, and profitability "nicely ahead," the analysts said. They noted that the results, which beat consensus estimates by a large margin, was delivered with a significant AI tailwind.

Okta's positioning in its ability to secure AI agents could become a significant driver for the company, with the closing of several AI-related deals in the quarter with contract values above the corporate average, the analysts said. The company's advantages in agentic security include its broad distribution across over 20,000 customers, its neutrality that allows it to work across different AI platforms, and its product Okta for AI Agents, according to the note.

Strong business momentum, sales productivity gains, and ongoing product innovation point to a positive fiscal H2, the analysts said.

RBC maintained the company's stock rating at outperform and raised the price target to $195 from $166.

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