5 Best Cybersecurity Stocks for Digital Protection (2025) | #hacking | #cybersecurity | #infosec | #comptia | #pentest | #ransomware

Why Cybersecurity Stocks Are Booming

While our economy has been computerized for a while, it is still getting increasingly connected. Data that used to be stored locally is now in the cloud. Work is not done in one office but remotely by delocalized teams, often in multiple countries. Most of the software we use is in the cloud. This means that vital or confidential business data is constantly circulated back and forth through the Internet, and virtually all devices are connected at all times.

This is equally true in our personal lives, where online identity and activities are often as important as the ones “in real life.”

The risks are even higher when it comes to defense and geopolitics, with “cyber” now considered by military analysts as a new “fighting domain” alongside sea, air, land, and space.

This makes cybersecurity a growing and all-important concern. Failure in this domain can paralyze businesses, allow for identity theft, or even endanger a nation’s safety. The number of malicious programs has increased by 20x since 2011, reaching an astonishing total of 1.3 billion.

The cybersecurity business model is inherently sticky, and clients will be very reluctant to cut cybersecurity subscriptions lest they be left exposed to catastrophic risks to their operations.

Consequently, the market for cybersecurity services is expected to grow by 12.9% CAGR until 2030, reaching $500B and more than doubling from the current $245B.

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Top 5 Cybersecurity Stocks for Digital Protection

1. Palo Alto Networks, Inc.

Palo Alto Networks, Inc. (PANW +0.24%)

Palo Alto is a leader in cybersecurity, focusing on firewalls and security platforms. Palo Alto’s platform strategy is powered by regular new product launches, covering more and more all possible cybersecurity needs through a coherent offering instead of patching it together from multiple vendors. Since 2019, the company has multiplied by 5x the number of yearly launches.

The growing selection of products contributes to existing clients increasingly using more and more modules from Palo Alto, leading to larger revenues per client over time, with many expected to use 5 modules or more by 2028.

The company is actively embracing AI to detect threats and handle how customers interact with it, through a new fully integrated platform: Prisma AIRS. Palo Alto is also looking to acquire Protect AI, described as “the broadest and most comprehensive AI security solution”. If the deal goes through, this would even further reinforce the position of Prisma AIRS as the leading AI cybersecurity platform.

Protect AI acquisition would match a general pattern of consolidation taking in the cybersecurity industry, with enterprise clients looking to have only one integrated solution, instead of a patchwork of multiple cybersecurity systems sometimes working poorly with each other.

Palo Alto is growing strongly, having passed the $5B threshold in Next-Generation Security ARR (Annualized Recurring Revenue) in Q3 2025. This makes Palo Alto a good cybersecurity for investors looking to invest in a cybersecurity industry leader and leading in adoption of AI to secure IT networks.

2. Fortinet, Inc.

Fortinet, Inc. (FTNT -0.89%)

Fortinet is one of the largest cybersecurity companies, offering integrated solutions to enterprises and SMEs. SMEs comprise a large percentage of the company’s clients (61%), differentiating Fortinet from its competitors, who are more interested in large enterprise clients.

The company is partially competing on price, claiming that its “Proprietary ASIC technology (SPU) provides 5x—10x better performance, contributing to a lower total cost of ownership” and “one of the lowest total cost of ownership in the industry.”

It is the leader in firewalls, controlling more than half of the market. When looking at revenues, it is clear that while more used, Fortinet products are also cheaper, which however does not impact the company’s profitability, with 81.3% in gross margin, 315% operating margins, and 37% free cash flow margins.

Together with the other major cybersecurity firms, Fortinet is likely to benefit from the trend of consolidating multiple disparate cybersecurity solutions into a unified platform. Unified strategies merging cybersecurity and network infrastructure will help as well.

Fortinet’s business is less US-centric than many of its competitors, with the USA making only 25% of total revenues and 100+ countries making half of revenues.

Fortinet’s leadership, focus on SMEs, and international markets make it a good stock for exposure to the global cybersecurity markets, especially with SMEs only now fully embracing the digital revolution. Its focus on affordable pricing might also be a strength in the case of recession or pressure from rising interest rates on indebted companies, and provide diversification compared to more US-centric cybersecurity stocks.

3. CrowdStrike Holdings, Inc.

CrowdStrike Holdings, Inc. (CRWD +1.59%)

CrowdStrike was founded with a cloud-first approach to cybersecurity, which was at the time a ground-breaking innovation. The company’s offer covers all categories of cybersecurity threats, and counts among its clients 18 of the 20 largest US banks, >70% of the Fortune 100 companies, and 44 out of 50 US States.

The cloud-first approach allowed it early on to bring together in one product what was and still mostly is a very fragmented industry.

CrowdStrike’s revenues are highly predictable, with 98% gross retention of its user accounts. CrowdStrike’s Annual recurring revenue (ARR) was $3.9B in Q2 2025, with a target of $10B ARR aimed for 2031.

CrowdStrike’s growth is supported by a quickly expanding total addressable market (TAM) due to many new markets emerging in cybersecurity. With additional offerings still in development and the demand generally growing, the company expects to expand its TAM from the current $116B to $250B by 2029

CrowdStrike made the global headlines for all the wrong reasons when it caused a major global IT outage in critical infrastructures in July 2024.

Since then, CrowdStrike has changed its content update procedures to prevent similar incidents in the future. New updates will be rolled out slowly and not everywhere at once, and customers can now pick if they are early adopters of these updates, delay, or even opt out entirely.

The generation of new leads and clients in the sales pipeline is apparently returning to “pre-incident levels.” So, overall, this incident has not affected the service’s popularity, even if it has certainly made many customers more likely to delay updating their systems.

The cloud-first approach of CrowdStrike has allowed it to take market share quickly with large enterprises and public institutions, and is now replicated by all the large cybersecurity companies. The company should also see its international business grow, with still 3/4th of the Global 2000 companies yet to enter the CrowdStrike ecosystem.

So, investors will want to pay attention to CrowdStrike’s ability to retain its initial advantage and grow abroad, despite mounting counter-attacks by its competitors also building more integrated platforms.

4. Zscaler, Inc.

Zscaler, Inc. (ZS +0.77%)

Zscaler has been a pioneer in cloud security since its foundation in 2007. The company’s sales strategy partially relies on a partner network/alliance strategy, including Amazon’s leading cloud service AWS or Microsoft, as well as large cybersecurity firms like CrowdStrike, Okta, or Splunk.

So while CrowdStrike might have been the first comprehensive cybersecurity tool in the cloud, Zscaler is still the largest security cloud, with $2.9B ARR, and 50M users from >8,650 customers, of which >35% of Global 2000 companies. Zscaler claims excellent results in its case studies, like an 80% faster user experience for GE, 35x fewer infected machines for NOY, or a 70% reduction in infrastructure costs for Siemens.

Zscaler has targeted the international market early, with 46% of its revenue coming from outside the Americas, and more than half of its own employees from abroad as well.

Zscaler’s business is mostly with enterprise-level customers, driving the company’s growth, with a 37% growth for customers >$1M ARR (Annual Recurring Revenue) and 25% growth for customers >$100k ARR.

The company has grown its revenues very quickly, by 50% CAGR since 2020, driven by the global wave of cloud computing adoption by companies of all sizes. The company also expects strong results from upsell (selling more to existing customers), with a 6x potential just from existing products.

Zscaler’s early move into the key point of cloud cybersecurity has made it a central partner for many of the largest players in the cloud industry and large corporations highly reliant on cloud services. This trend is still ongoing at a strong pace and should carry Zscaler’s growth.

5. Okta, Inc.

At the core of most cybersecurity problems is the concept of identity. Is this person/computer/software who he claims to be, and is he authorized to access or modify this dataset?

This is a crucial question because too easy access leads to security breaches, but too strong access can make an IT system annoying, inefficient, or useless. So, getting this question right is central to having functioning IT systems that are secured from intrusion and data thieves.

Okta provides identity verification and cloud security certification with 99.99% uptime through its Okta Identity Platform. This is a growing field, especially with so many activities moving to the cloud, and remote or hybrid work becoming a new business model.

This is driving Okta’s revenue growth, with 20,000+ customers and standing at 15% CAGR in the 2023-2026 period.  The company’s client list includes various industry leaders, like pharmaceutical maker Takeda, utility Engie, FedEx, HP, S&P Global, and T-Mobile.

Source: Okta

Okta was somewhat of a “pandemic stock,” with its stock price rising rapidly in 2021 before falling back down to more reasonable levels. However, its business performance since, as measured by revenues, cash flow margin, or client base, did not show any slowdown in growth, making a much better value proposition today than in 2021.

So, this might be an opportunity for investors to buy the stock at a cheaper point, while identity certification and other remote work-centered business models are still going strong and becoming a “normal” part of the economy.