BMO Capital Markets upgraded Okta to Outperform and raised its price target to $97, reflecting the brokerage's view that identity management will retain solid demand as organizations expand their use of artificial intelligence agents across corporate systems.
BMO said identity and access management tools are poised to become more central to enterprise security as software agents - which operate on behalf of users or systems - are deployed more broadly. That shift, the firm said, could spur new demand for identity security platforms capable of managing both human identities and machine or agent identities.
Okta, a leading provider of identity and access management software, is positioned to gain from that potential market development, according to BMO. The brokerage expects many enterprises to extend the identity platforms they already use in order to include governance and control for AI agents and related automated processes.
BMO noted that while a large number of companies are adopting AI agents, many have not yet implemented governance systems to control those agents. That absence of controls could prompt organizations to increase spending on identity security tools in the coming years, the firm said.
The brokerage pointed to Okta's scale, its integrations with other enterprise tools and its established customer relationships as competitive advantages over smaller identity security vendors. Those smaller vendors, BMO suggested, may lack the reach or the trust required to serve as a central identity control platform across an enterprise.
BMO also highlighted Okta Identity Governance as a product with a long runway for growth, and said it expects Okta to sustain steady subscription revenue growth into fiscal 2027. The firm projects that initially there will be little direct revenue contribution from AI agents, but that any agent-related revenue could become more meaningful in fiscal 2028 as adoption increases.
Overall, BMO framed its outlook around the expanding role identity systems may play in managing both human users and automated agents across enterprise networks - a development that could broaden the addressable market for identity security providers such as Okta.
Summary
BMO upgraded Okta to Outperform and set a $97 price target, citing confidence that identity and access management will remain in demand as companies deploy AI agents. The firm expects Okta to leverage its scale and integrations to capture spending on identity security and governance, forecasting steady subscription revenue through fiscal 2027 and potential agent-related revenue growth by fiscal 2028.
Key points
- BMO upgraded Okta to Outperform and raised its price target to $97.
- The brokerage expects identity and access management to gain importance as enterprises deploy AI agents, creating potential new demand for platforms that manage both human and machine identities.
- Okta's scale, integrations and customer relationships are cited as advantages versus smaller identity security vendors; Okta Identity Governance is identified as having substantial growth potential.
Risks and uncertainties
- Adoption and governance of AI agents remain uneven - the timing and magnitude of agent-related revenue is uncertain, with BMO expecting limited contribution until fiscal 2028.
- Smaller identity vendors could evolve or form partnerships that alter competitive dynamics despite Okta's current scale advantage.