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Top 21 Cybersecurity Stocks for Smart Investors

Introduction

COVID kickstarted the culture of work-from-home and made people as well companies realize the importance of cybersecurity. This change, in turn, encouraged individuals of all age groups and walks of life to invest in cybersecurity stocks. Additionally, the rise of cloud-based business solutions has also raised the bar for cybersecurity measures and emphasized its need in the current era of digitalization.

According to Surfshark, the percentage of data breaches significantly reduced by 18% from 2022 to 2023. The number of breached accounts were down to 299.8 million from 366.7 million.

However, it is important to consider the fact that even though the number of data breaches has scaled down globally, some countries have witnessed a rise. In 2023, the top 5 countries ranked by the number of breached accounts are different from the ones ranking for the year 2022. The US, Russia, and France have consistently maintained their positions in the top 5, while other rankings have undergone changes for the consecutive year.

The aforementioned changes have surged the demand for next-generation security software. For beginners, cybersecurity stocks are shares of companies that help protect computer systems and prevent data breaches/leaks. According to Forbes, the stocks did pretty well in 2023 as prices of these stocks have increased by approximately 26.5% from the beginning of the year up to the present point in time. Note: This percentage is a measure of the growth or upward movement in the stock prices within that specific timeframe (usually the present fiscal year which in this case – 2022 to 2023).

This rise is indicative of more data breach events and ransomware attacks. When unauthorized individuals gain access to confidential files and portals with sensitive data and steal them, it can be referred to as a case of data breach. Additionally, when a group of hackers demands a certain amount (ransom) to release control over a system or network, it is referred to as a ransomware attack.

At present, more and more companies/organizations are investing their money on cybersecurity.  They've spent about 12.7% more compared to the same period last year. Thus, it is safe to conclude that - Cybersecurity stocks are a red-hot niche of the tech industry, and knowing how to invest in them can yield significant returns in the upcoming decade. Also, join the professional Cybersecurity Training Program to master this field.

Top Cybersecurity Stocks to Explore in 2024

 

There are several cybersecurity firms that offer essential services and products as well as assistance to enterprises that conduct business online and through electronic communication networks. Below is a summary of some of the top cybersecurity stocks to follow this year.

1. CrowdStrike Holdings

Regarding the best Cybersecurity stocks, CrowdStrike Holdings offers endpoint security, a defense for computers, servers, laptops, and other networked devices. CrowdStrike is especially well-suited for facilitating remote work because it is cloud-based. CrowdStrike's software utilizes machine learning, a subset of Artificial Intelligence, to identify security bugs and track down threats. Moreover, Crowdstrike's software is easily deployable, reaching millions of individuals working from home and securing trillions of online devices. To better serve its customers, the company has continuously expanded the number of modules on its platform. Moreover, it has established new integration agreements with other tech firms, ensuring more uniform data protection throughout an organization's IT infrastructure.

2. SentinelOne

Another recent pure-play cybersecurity startup to debut on the stock market is SentinelOne. SentinelOne's initial public offering (IPO) in June 2021, the largest ever for a cybersecurity company, raised $1.2 billion in cash and valued the company at $10 billion. The stock did fall below its IPO price due to SentinelOne's slowed revenue growth and a difficult year for the stock market in 2022. However, it slowly started recovering by Jan 2023. As of 2024, shares of SentinelOne Inc. (S) have jumped after Bank of America Securities upgraded the stock and lifted its price target after witnessing the faith and optimism in the cybersecurity industry. Since SentinelOne is steadily moving closer to becoming a profitable stock, it has become a preferred choice for investment in the world of cybersecurity stocks.  It competes with CrowdStrike since it runs a cloud-based endpoint security platform. Market acceptance of its ability to identify and address cybersecurity risks is high. Still, this company comes in a leading position in the list of best cybersecurity stocks. Besides investment, if you are also looking for a long-term career as a Cybersecurity professional, begin your journey with the best Cybersecurity courses

3. Datadog

A cloud-native tool called Datadog is created to gather, watch over, and provide insights on cloud-based data and processes. To reduce the workload of busy IT teams, the corporation uses AI to help automate the process of monitoring huge and complicated data sets. One of the best cyber security stocks, Datadog has also continuously added additional modules, such as cloud-based security and data monitoring, to its platform's functionality. Data analytics software is a significant and quickly expanding sector of the tech industry, which is good news for Datadog. Elastic (NYSE:ESTC) and Dynatrace (NYSE:DT) are two additional deserving software developers to consider in this market besides Splunk.

4. Cloudflare Inc

Cloudflare is another name in the top cyber security stocks list. It is renowned for creating world-class software solutions for cybersecurity. It offers a global cloud platform, offering services including load balancing, video streaming, security, domain registration, and more. Also, after Cloudflare improved its web infrastructure to support the latest generation of artificial intelligence (Gen AI) applications, its stock value increased by 4.4%, closing at $81.35 on the stock market. In the entire year of 2023, the company's shares rose by 84%, recovering from a drop in April.

According to Cloudflare, unprecedented numbers of new large clients contributed to revenue growth, making it a better option in cyber security companies' stock. Get an in-depth understanding of Cybersecurity and related topics, explore insightful articles and courses at JanBask Training.

5. Microsoft

Microsoft may not be the first company that comes to mind when considering companies to purchase the  best cybersecurity stocks. However, Microsoft is an attractive option if you want exposure to the industry in a way that allows you to sleep soundly regardless of what is occurring in the market. The business doesn't only focus on cybersecurity. However, the cybersecurity division is responsible for a rising company earnings. The cloud-based Office 365 software can also incorporate all the business' security measures. Furthermore, the corporation expanded its cybersecurity industry through acquisitions using its sizeable war chest.

6. Fortinet

Fortinet (FTNT), which specializes in offering solutions oriented toward securing data centers, is a well-liked option among the top cyber security stocks. FTNT stock carries a premium valuation, trading at 42 times the anticipated earnings. However, the business is firmly profitable, and through 2025, it is anticipated that revenue and earnings will increase by more than 20% annually. If the company can achieve those growth goals, its value should increase. Based on analysts' average price targets of $71, the present potential for FTNT stock is 28%, which is counted among the best cybersecurity stocks. 

To add wings to your cyber security career, consider joining the JanBask Training Community, where you can learn from industry experts.

7. PFPT (Proofpoint)

 American security firm Proofpoint was established in 2002 and is ranked among the top cyber security companies in stock. It provides a variety of cybersecurity services, including cloud protection, network sandboxing, and email protection. Several data protection systems, such as incident response, eDiscovery, and secure communication, are included in Proofpoint's security-as-a-service platform. Since its beginnings as an email security provider, the company's clientele now comprises large and mid-sized businesses.

8. Palo Alto Networks (PANW)

Palo Alto Networks (PANW), a pure-play cybersecurity company and one of the top cybersecurity stocks, sells security appliances, subscriptions, and support to businesses, governmental organizations, and service providers across the world. Firewall appliances, virtual firewalls, endpoint security, cloud security, and cybersecurity analytics are among the company's product offerings. Palo Alto Networks' next-generation firewall equipment is the foundation for its cybersecurity leadership. The company's product offering has recently expanded beyond network security to include cloud security and tools to help automate security operations. The complexity of an entity's threat management increases along with the volume of data and traffic generated off-premises.

9. Zscaler

Zscaler helps businesses defend against common cybersecurity attacks by securing important data and apps. The security company's Zero Trust Exchange platform offers speedy cloud access while assisting organizations in lowering risk and is counted among the top cyber security stocks. The platform's four key advantages are internet access, digital experience, private access, and cloud protection. Every day, the platform processes 160 billion transactions in 185 nations. The company has more than 80 industry partners, including Microsoft and Amazon. Despite strong sales growth, ZS shares fell after earnings due to a weaker-than-expected projection.

10. Check Point Software

Checkpoint is an Israeli company that was established in the year 1993. Currently, it is regarded as one of the biggest cybersecurity companies in the global market. This is also why; it is considered one of the top cybersecurity stocks to invest in. It has made noteworthy contributions in the field of online security. Checkpoint has a diversified market – 49 % of its sales come from the Middle East, Europe, and Africa; 10 % from Asia; and the remaining 40 % from America.

11. Okta

Okta is into identity and access management. Its way of securing systems and data is a tad different from others. They use something called "zero-trust architecture," which means they always check and verify a user before allowing access to data and system-based applications. It's almost like having a counterspy agency that makes sure everything is secure. In a world where people use mobile devices and cloud services a lot, Okta's software is highly regarded and required in the market . Okta's software helps to manage and secure the various access points within an organization.  Even though there was a cyberattack in January 2022 that affected some of Okta's customers and caused a decline in their stock during a difficult market period, Okta is growing and winning its way back into Wall Street's good books. Okta’s shares have witnessed a jump of over 20%, immediately after the cybersecurity specialist published its fourth-quarter earnings report. More and more customers are choosing Okta to keep their identity and access to data secure.

12. Splunk

Splunk Inc. is an American software company based out of San Francisco, California. It collects and manages massive volumes of machine-generated data. It also helps companies to constantly monitor their digital activity and suggest the right set of actions to tackle a potential data breach as well as handle one in real-time. Data analytics is gradually becoming an essential part of IT management, and Splunk plays a vital role in how the organizations keep things secure and monitored. The company believes its yearly recurring revenue will increase a lot in the next few years. Even though Splunk has many competitors, some with newer and more adaptable software for today's cloud computing, Splunk is considered a good deal by some measurements, especially when you look at the company's basic things like how much money it's making.

13. Akamai

Akamai Technologies is an American company that offers content delivery network (CDN), cybersecurity services, and cloud services. It is headquartered in Cambridge, Massachusetts. Akamai’s performance has improved in the last five quarters and its stock prices are expected to take a positive turn. In the second quarter of 2023, 29 out of 910 hedge funds had invested in Akamai Technologies, Inc. In addition to this, analysts suggest that Akamai’s revenue will grow at a rate of 7.1% per year in the next three years. It is considered to be a neutral choice of investment for investors.

14. First Trust NASDAQ CEA Cybersecurity ETF

First Trust NASDAQ CEA Cybersecurity ETF (CIBR) primarily focuses on the cybersecurity industry. If an individual decides to invest in it, they will have to pay an annual expense ratio of 0.6%, which is $6 in fees for every $1,000 invested. This makes this stock a reasonably affordable option for investors interested in the cybersecurity sector. This ETF is usually traded in good numbers and the risk is considered to be low. The average price target for CIBR is $60.93 and is typically considered to be a moderate buy.

15. ETFMG Prime Cyber Security ETF

The ETFMG Prime Cyber Security ETF, also known as HACK, is a special investment fund that concentrates on the cybersecurity industry. Its goal is to perform as well as the Nasdaq ISE Cyber Security Select Index. Right now, it has 57 different stocks in its collection, mainly from smaller companies in the cybersecurity field. This fund oversees assets worth $1.4 billion and has an expense ratio of 0.6%. This is a small fee one has to pay for using the fund.

16. Darktrace Plc.

Darktrace plc has been doing good financially and has reported a 24.4% increase in annual recurring revenue followed by a big rise in cash flow. However, there are some concerns. The CEO doesn't want to go to the U.S. for a lawsuit related to another company's financial problems. They've also made changes in how they pay their sales team, affecting cash flow. Despite these challenges, Darktrace is expecting good revenue growth and profit margin. But they've made some changes in how they do things, like paying commissions all at once instead of in parts, which has affected cash flow. They believe things will get better next year.

17.Global X Cybersecurity ETF

Global X Cybersecurity ETF (BUG 1.68%) is a new player in the cybersecurity ETF world. It started in late 2019 but by early 2023, it had $727 million in assets and charges a fee of 0.51%. This ETF is a bit more focused, with only 23 stocks in its collection. Interestingly, it has been doing better than other similar funds on this list since it started.

18. Rapid7

Founded in 2000, Rapid7 is a cybersecurity company that specializes in cloud-based cybersecurity. They gather data from your entire system, making it simple for your team to handle potential threats, monitor for suspicious activity, and prevent attacks. In the third quarter of 2023, Rapid7’s earnings confirmed the industry’s growth, with their revenue increasing by 13% annually. Notably, Steve Cohen’s Point72 Asset Management is the largest investor, having invested $87.7 million in Rapid7, Inc. (NASDAQ:RPD).

19. CyberArk

CyberArk Software Ltd. (NASDAQ: CYBR) is an Israeli cybersecurity firm based in Petah Tikva, Israel. The company achieved success in November 2023 when Glasgow Caledonian University chose its identity management platform to enhance protection against cyber attacks. In the fourth quarter of 2023, its subscription revenue reached $150.3 million, showing a 70 percent increase from the fourth quarter of 2022, which was $88.5 million. The largest shareholder is Robert G. Moses of RGM Capital, holding a $193 million stake.

20. Varonis Systems, Inc.

Varonis Systems, Inc. (NASDAQ: VRNS) – a company that acts like a guardian for the internet, making sure everything stays safe. They have special tools to keep an eye on computer networks and spot any issues or dangers right away. In November 2023, they upgraded their tools to be even better at protecting against harmful emails on Microsoft's Office 365. The big supporter of Varonis Systems is SoMa Equity Partners, guided by Gil Simon, who put in a whopping $93.2 million to support Varonis Systems, Inc.

21. Qualys Inc.

Qualys is an American technology firm. It is headquartered in Foster City, California. Qualys specializes in cloud security and compliance work. It has also devised a wide range of cybersecurity products for industries from various sectors. In October 2023, Qualys launched a series of cybersecurity products specifically tailored for small businesses. This move created a positive impact and made the share market in their favor. The company's major investor is Terry Smith from Fundsmith LLP, owning 658,407 shares valued at $85 million. Qualys was also recognized as one of the top-performing cybersecurity stocks in 2023.

So these were some of the top cybersecurity stocks you can think of investing in 2024. Continue reading to learn how to invest in them with incredibly minimal costs and get free access to pricey stock research tools.

How to Invest in Cybersecurity – The Right Approach

There are several approaches to take if you want to investigate how your portfolios could profit from the high-secular growth in cybersecurity. Below is a list of a handful of them.

  • Consider Thematic ETFs: Exchange-traded funds can bring broad exposure to the US as well as global companies that are working on providing network protection. 
  • Find Top Endpoint Security Providers: Earlier, these providers were focused on protecting the perimeter of a network by protecting the entry points into different connecting devices like computers and mobile phones. 
  • Do Research on Defenses and Aerospace Firm: Companies from these spaces are increasingly investing in cybersecurity within their offerings. This has increased the geopolitical risk that blurs the lines between national defense and cybersecurity. 

Cybersecurity is still one of the most compelling secular growth opportunities. The worldwide cybersecurity market is worth $236.75 billion in 2023, and experts predict it will grow to $506.79 billion in the next ten years. Cybersecurity has been doing better than similar software industries. If you're thinking about investing, remember that if the overall economy faces challenges, the cybersecurity industry might also be affected. So, if the values of cybersecurity stocks drop, be smart about increasing your investment.

Quick questions you should ask your advisor to gain a better understanding on cybersecurity stocks:

  • How can I get a piece of the cybersecurity industry's growth while still achieving my long-term investment objectives?
  • What are some strategies for boosting the cyber capabilities of particular cybersecurity providers and defense companies?

Apart from its good performance in the stock market, the cybersecurity segment is an excellent option to make a brilliant career. If you are in the tech field and wish to explore more options, cybersecurity is a great career choice. The growing percentage of data breach and data thefts has made us realize the worth of skilled cybersecurity professionals now more than ever. In the next section, we will discuss cybersecurity's scope and earning potential.

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Career Scope in Cybersecurity - A Glimpse

Making your career in cybersecurity creates opportunities to follow your passion within the world of information security and build a career path that is right for you. As per the report by the US Bureau of Labor Statistics, there is a 33 percent growth in the number of cybersecurity openings during 2020-2030. Apart from its growth potential, the Cyber Security Salary range is excellent.

As the importance of cybersecurity, more specialized roles are emerging. Cybersecurity jobs vary from entry-level to executive management and everything in between. Following are the five common career paths within this high-demand field – 

  • Network Engineer 
  • Security Architect
  • Information Security Analyst
  • Chief Information Security Office 
  • Ethical Hacker

Conclusion

In the next four to five years, it is predicted that businesses and the government will invest a total of about $100 million in the cybersecurity industry. Security for the Internet of Things (IoT) is predicted to increase this value by $29 billion. You can take advantage of the opportunity by investing in the top cybersecurity stock and by pursuing a professional Cybersecurity Training Course

The cheat sheet on  the top 10 cyber security stocks is crafted so that you don't need to be an expert. Even if you don't already own NASDAQ stock, reading through this list and the descriptions of the individual companies will give you a good idea of what to watch out for when investing in cybersecurity stocks.

Furthermore, you are already familiar with the names of the businesses you should focus on. If you have realized the importance of the cybersecurity domain and want to engage it in more ways than just as a trader, consider upgrading your cybersecurity skills with a Cybersecurity Training Program to enter this field.

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We hope you found this blog informative and helpful. If you have any doubts or confusion, you can reach us here.

Frequently Asked Questions

Q1. Are cybersecurity stocks a good investment? 

Ans:- The global cybersecurity industry is anticipated to grow at a compound annual growth rate of 13.4%, reaching $376 billion by the end of 2029, according to Fortune Business Insights. Some cybersecurity stocks continue to trade at exorbitant prices. Others don't always turn a profit.

Q2. What is the future of cybersecurity stocks?

Ans:-  When it comes to the future scope in Cybersecurity, Gartner anticipates an 11% increase in cybersecurity investment in both 2022 and 2023. In a recent analysis, Bank of America stated that cybersecurity stocks that provide services through cloud computing platforms will be in a better position. 

Q3. Why are cybersecurity stocks beating the market?

Ans:-  Even as other sectors of the computer industry are suffering from economic concerns, demand for cybersecurity goods and services is maintaining steady. Compared to betting on the overall market, investors who invested in cyber-focused ETFs or cybersecurity stocks have lost less money this year.

Q4. Is this the best time to invest in cybersecurity stocks?

Ans:-  Right now, cybersecurity is growing a lot because more and more people are using digital technologies, AI, and cloud solutions. Since there's a higher chance of data threats, it's a smart idea to invest in cybersecurity stocks.

Q5. How much money do I need to put into cybersecurity?

Ans:-  Generally speaking, experts advise allocating 10% to 15% of your IT budget to cybersecurity and data breach protection.

Q6. What makes cyber security so well-liked?

Ans:-  Cybersecurity is crucial since it guards against theft and destruction to many types of data. This covers delicate information, personally identifiable information (PII), protected health information (PHI), personal data, data pertaining to intellectual property, and information systems used by the government and business.

Q7. What job opportunities exist in cyber security?

Ans:-  When you first enter the field of cybersecurity, you can work as a help desk technician, network administrator, or software developer. After obtaining some IT experience, many cybersecurity experts start out as junior information security analysts.

Q8. Is cyber security a lucrative field?

Ans:-  Many cybersecurity positions pay more than other computer occupations, even though more seasoned experts are likely to receive greater earnings. According to Glassdoor, the average salary of an entry-level cybersecurity professional was around $73000 in the last quarter of 2022.

Q9. Is studying cyber security challenging?

Ans:- Although learning cybersecurity can be difficult, it doesn't have to be, especially if you have a strong interest in technology. Develop an interest in the technologies you use, and you could discover that difficult abilities become simpler. At present, numerous working professionals are engaging in online cybersecurity learning while simultaneously managing their full-time jobs. The ultimate key lies in staying focused and motivated.

Q10. Is it necessary to know coding before enrolling for the cybersecurity training course?

Ans:-  Most entry-level cybersecurity positions don't require coding knowledge. However, coding may be required to grow in the field of cybersecurity specialists looking for mid- or upper-level positions.


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