Cyber security guru stocks are one of the fastest-growing segments in technology. These companies can help safeguard both personal and professional information against hackers.
As cybersecurity experiences steady expansion, experts anticipate that cybersecurity stocks will thrive in this growing market.
The Importance of Cyber Security in 2024
As we progress through 2024, the significance of cyber security continues to escalate, not just as a protective measure but also as a wise investment opportunity through cyber security stocks. The digital landscape is evolving at an unprecedented rate, bringing with it sophisticated cyber threats that demand advanced defence mechanisms. This year, more than ever, cyber security is a critical pillar supporting the digital ecosystem.
The increasing sophistication of cyberattacks in 2024 has made it clear that traditional security measures are no longer sufficient. With advancements in AI and machine learning, cybercriminals are employing more complex strategies, leading to a heightened need for innovative cyber security solutions. This escalation in threats has a direct impact on the valuation and potential growth of cyber security stocks, making them increasingly attractive to investors.
Furthermore, the expansion of IoT and the integration of 5G technology have vastly increased the number of connected devices, each representing a potential vulnerability. Cybersecurity in 2024 is not just about safeguarding data; it’s about ensuring the integrity of an interconnected world where everything from home appliances to urban infrastructure is online. The companies providing solutions for these expansive networks are the ones behind the promising cyber security stocks on the market.
Compliance with evolving regulatory frameworks is another aspect boosting the importance of cyber security. Regulations are becoming more stringent, reflecting growing concerns over data privacy and security. Stringent regulations are compelling organisations to invest in robust cyber security measures, fuelling the growth of the cyber security sector and, by extension, the stocks within this market.
In addition, as businesses and the cyber security guru continue to digitise their operations, the role of cyber security in ensuring business continuity has never been more essential. Cyber threats not only pose risks to data and privacy but also threaten to disrupt business operations, highlighting the need for resilient cyber defences. This demand for uninterrupted business operations is a driving force for the cyber security industry and a catalyst for the growth of related stocks.
In 2024, investing in cyber security stocks is more than a financial decision; it’s an acknowledgment of the pivotal role that cyber security plays in our modern digital era. The sector’s continuous growth, driven by the escalating complexity and frequency of cyber threats, positions it as a key area for investment that offers both security and potential financial returns in a rapidly evolving digital world.
So What Are The Best Cyber Security Stocks to invest in Now?
It seems evident that the increasing digitalisation of assets and the rising threat of cyberattacks have made this industry more relevant than ever.
Companies specialising in cyber security are not just addressing current threats; they’re also shaping the future of digital safety. This makes them potentially lucrative investment opportunities.
The key is to identify those stocks that are not only leaders in innovation but also have a solid track record of adapting to the ever-changing landscape of cyber threats. Understanding the intricacies of this market is crucial for investors looking to capitalise on the growth and resilience of the cyber security sector.
1. Palo Alto Networks
Palo Alto Networks protects tens of thousands of organisations against cyber breaches, creating trust in the digital era. Their comprehensive cybersecurity expertise, dedication to innovation, and game-changing Next-Generation Security Platform empower customers to confidently pursue digital-first strategies while safeguarding their most precious data assets.
The company provides an array of products and services, such as next-generation firewalls, malware protection, cloud and data security, and its own security operating platform, to help shield customers from cyber threats by offering deep visibility into network traffic patterns as well as precise control. Their advanced malware prevention system, equipped with machine learning algorithms and global intelligence databases, enables the detection of cyberattacks in near real-time.
Palo Alto Networks goes beyond its core cybersecurity offerings by also offering Panorama, a network security management product that seeks to streamline all aspects of the cybersecurity process. Panorama promises unified policy management, centralised visibility, simplified configuration, automated threat response capabilities and unrivalled scalability, offering all-in-one resiliency and protection against attacks.
2. CrowdStrike
CrowdStrike stands out as an ideal cybersecurity stock to invest in due to its rapid sales growth and healthy cash flow. Though not as impressive as pure-play cybersecurity companies such as SentinelOne (S 0.1%) or Fortinet (FTNT), CrowdStrike remains among the fastest-growing firms in this space.
The company’s growth has been propelled by increasing interest in their cloud-based security platform, which uses machine learning and specialised databases to detect malware on laptops, mobile devices, and other devices that access corporate networks. They have also expanded into incident response and attribution services and their revenues have seen an impressive 7% year-on-year increase. Furthermore, they significantly raised the full-year guidance for subscription revenue.
Even after their recent selloff, cybersecurity stocks remain attractive investments. Cyberattacks are becoming more sophisticated and dangerous; CEOs and CIOs should prioritise protecting their digital infrastructure to counter cyber threats. This should spur an investment cycle within this sector, rewarding innovative cybersecurity companies for their work.
Contrary to other fast-growth software as a service (SaaS) companies, cybersecurity firms tend to be profitable with low long-term debt levels, which allows them to build up cash reserves and make strategic acquisitions. Fortinet recently announced plans to purchase application security management provider Bionic.
3. Zscaler
Zscaler is a cloud security provider that protects users, devices, and applications against cyberattacks and data loss by creating secure connections across users, devices, and applications. Through their Zero Trust Exchange platform, they offer fast connections over the Internet as if it were part of their corporate network, without needing a VPN. Their technology reduces latency and increases application performance, all while eliminating multiple solutions altogether.
Zscaler’s cloud-native architecture makes for easy scalability, and their management platform makes configuring security policies straightforward. Their security features include Next-Generation Firewall (NGFW), Secure Web Gateway (SWG), CASB, DLP, and Sandboxing capabilities, providing what Gartner refers to as an “SSE” solution, which offers a single point of control over multiple security functions.
Some of the world’s largest enterprises and government agencies use this platform to protect against cyberattacks and potential data loss. With its flexible, scalable architecture, they can deploy security measures within weeks; additionally, it scales with their business as it expands while providing a consistent user experience.
Although cybersecurity stocks have experienced dramatic gains, it’s essential that investors assess if these companies truly deserve such lofty valuations or whether investor enthusiasm has run amok. This article assesses whether the current valuations of two cybersecurity leaders—Cloudflare and Zscaler—are appropriate or if investors have overestimated their growth potential.
4. Fortinet
Fortinet (FTNT) disappointed investors three months ago when it released its guidance, and its third-quarter report this week failed to restore investor enthusiasm. When Fortinet reduced 2023 revenue guidance to just below $5 billion at midpoint, its stock plunged 25%. Despite these gloomy numbers, analysts expect Fortinet to continue experiencing revenue growth for some time yet.
Customer satisfaction is of great importance at this company and they continually look for ways to improve their products, such as offering virtual wire pair features that allow firewalls to connect directly with switches and access points; this feature is essential for enterprises relying on security fabric architectures.
As well, the company places great emphasis on sustainability and corporate governance, as evidenced by their membership in the UN Global Compact.
Attractive features of Fortinet’s business model include its stable stream of annual recurring revenue that allows it to weather economic headwinds—one reason it remains one of the premier cybersecurity stocks available on the market today. However, investors should keep in mind that its earnings have historically been volatile; due to this factor alone, it may pose higher risks than comparable stocks.
