Prominent financial commentator Jim Cramer has identified Okta, Inc. (NASDAQ: OKTA) as a noteworthy contender in the software sector, advising investors to consider a modest acquisition of its shares. His recommendation stems from the company's pivotal role in identity management and cybersecurity, an area he anticipates will become increasingly vital with the proliferation of artificial intelligence within enterprises. Despite recent market skepticism towards enterprise software, Cramer underscores Okta's robust business model and its potential to capitalize on the growing need to secure AI agents.
Cramer initially excluded Okta from a list of undervalued software stocks due to its projected 7% earnings growth for the year, a figure he deemed uncharacteristically low for a company of its caliber. However, a conversation with Okta CEO Todd McKinnon provided a fresh perspective. McKinnon highlighted the immense opportunity for Okta in securing thousands, if not millions, of AI agents being deployed across various organizations. This strategic positioning resonated strongly with Cramer, altering his view on the stock's long-term prospects.
During an October 16, 2025, broadcast, Cramer elaborated on his positive outlook, noting that Okta, a leader in identity verification, boasts impressive financial metrics and a resilient business. He acknowledged the prevailing hostility in the market towards enterprise software, even towards previously robust segments like cybersecurity. Despite Okta's strong performance in recent quarters, its stock had seen a significant decline, dropping over 30% from its May highs and even falling below its post-April recovery levels. This market indifference, Cramer observed, persisted regardless of Okta's consistent achievements.
Ultimately, Cramer's endorsement of Okta is rooted in its fundamental strength and its forward-looking strategy in the evolving landscape of AI and cybersecurity. He sees the company's current valuation, trading at 23 times its projected earnings, as an opportune moment for investors to 'nibble' at the stock, implying a cautious but optimistic approach to adding it to one's portfolio.