This ETF is also the most concentrated fund here and is spread across just 27 cybersecurity stocks. At almost 8% of the fund as of this writing, Palo Alto Networks is by far the largest holding. Data analytics and cybersecurity monitoring outfit Datadog (DDOG -3.59%) and cybersecurity and compliance software company Rapid7 (RPD -0.46%) round out cyber security stocks the top three spots. Ultimately, the choice of investment method depends on an individual’s investment goals, risk tolerance and personal preferences. Regardless of the method chosen, investing in the cybersecurity industry can provide opportunities for growth because some of the top-rated tech stocks on Marketbeat are cybersecurity-related.
The cybersecurity market has seen a stunning growth rate over the past few years. To meet this need, many B2C cybersecurity solutions have become prominent in recent years. They have established themselves as leaders in providing traditional security solutions such as firewalls, intrusion prevention systems, antivirus software and other similar products. Cloud security also involves establishing clear security policies and procedures for cloud use and ensuring that all users of cloud services understand their responsibilities for maintaining security. In addition, cloud security often requires compliance with industry regulations and standards, such as HIPAA, GDPR and PCI DSS. Thanks to its diversified business model and experienced management, the company boasts one of the top margin profiles in the sector, with double-digit sales and earnings expansion over the past several years.
- That’s a key reason that Zscaler has a customer base that includes over 20% of the Fortune 500.
- In 2021, Check Point acquired Avanan, a cloud email and collaboration security company.
- The list from eSecurity Planet features 20 privately held and publicly traded companies, as well as 22 honorable mentions across a range of stock exchanges.
- This will likely lead to greater accountability for companies that fail to meet cybersecurity standards and new opportunities for companies that can provide effective cybersecurity solutions.
- Forbes’ top investment experts share 7 overlooked stocks in this exclusive report, 7 Best Stocks To Buy For The Second Half of 2023.
- Nearly 90% of these assets fall into the information technology category, with the remainder belonging to the industrial sector.
IBM’s security division offers customers an advanced and integrated portfolio of enterprise security products and services. IBM X-Force helps businesses and organizations integrate security solutions into their everyday functions, and provides help with risk assessment, incident detection and threat response. The first cybersecurity company on this list is global technology firm Broadcom, which has built a large portfolio of embedded and mainframe security solutions, as well as payment authentication software. The company broadened its offerings in November 2019 with the acquisition of cybersecurity firm Symantec and now offers a suite of integrated Symantec cybersecurity software. Zscaler has seen outstanding success in recent years, with its revenue growth nothing short of impressive. In 2022, annual revenue reached a staggering $1.09 billion, a 62% increase from the year before.
Cloud security refers to the practices and technologies designed to protect cloud computing environments and their data and applications. Cloud security measures are necessary because data in the cloud can be vulnerable to a wide range of cyber threats, including data breaches, unauthorized access, data loss or leakage and malware attacks. First, the growing demand for cybersecurity solutions has led to a significant increase in the industry’s market size, with experts predicting it to reach $250 billion by 2025. Secondly, as more and more companies and organizations recognize the importance of protecting their digital assets, the need for advanced cybersecurity solutions is only expected to grow. Not many people would dispute the importance of cybersecurity in organizations. Cyberattacks are up over 500% since the start of the COVID-19 pandemic.
What are the top cybersecurity stocks to invest in?
After purchasing cybersecurity stocks, you should monitor your investments regularly to ensure they meet your expectations. Consider setting up alerts or using technical analysis tools to help you make informed investment decisions. Identity management solutions also enable organizations to enforce access controls, monitor user activity and detect and respond to security threats. Identity management is a process that involves the management of the digital identities of users in an organization. It is an essential component of cybersecurity that focuses on establishing and maintaining secure access to systems, applications and data.
However, cybersecurity stocks have the advantage of being essential to a work-from-home atmosphere. Although prices have gone up and down, the cybersecurity sector still offers plenty of potential. NortonLifeLock is a consumer facing cybersecurity company that currently offers excellent value. Their platform is multi-functional, which makes them stand out from other cybersecurity companies. Since Ping offers cloud based products, they’ve been able to adapt to the needs of companies that are working from home.
Zscaler, Inc. (NASDAQ: ZS)
Legacy security vendors refer to companies that have been providing traditional security solutions for a long time, typically before the advent of cloud computing and the widespread use of mobile devices. CyberArk Software (CYBR, $141.97) is a developer of identity security systems. Its solutions include single sign-on, multi-factor authentication, directory services and lifecycle management. At the core of Fortinet (FTNT, $64.27) is a comprehensive system to secure networks.
There’s also heavy stock compensation ($526.5 million last fiscal year), but that is compared to a market capitalization of more than $35 billion, so about a 1.4% increase. Estimates of future revenue and profit growth suggest a move to profitability in the next year, with stock prices generally climbing since a relative low point in January 2023. The cybersecurity industry is experiencing rapid growth due to the increasing number of cyber-attacks and data breaches. As hackers become increasingly sophisticated in their attacks and technology becomes more pervasive, the need for effective cybersecurity solutions has grown.
The private equity firm has invested in cybersecurity startups, such as Illumio. Microsoft aims to integrate artificial intelligence tools into its security platform. Called Microsoft Security Copilot, the platform uses a new AI assistant. One of its developments is a recently announced software-based internet security product being built and deployed with one of Europe’s leading telecom providers, Telefónica (TEF 0.72%). The company also recently announced a partnership with Singapore’s Quantum Engineering Programme to develop next-gen security for quantum computing. Simply put, Okta delivers solutions ranging from passwords to biometrics to help its customers easily identify, verify and enforce who accesses a network at a given time.
“Some are fine with that because they don’t want to deal with 25 different vendors,” Koujalgi says. “Others say they can’t compromise security.” But there are many companies in the first camp. Revenue in 2022 was $4.4 billion with a net income of $857.3 million, which has been growing since 2015. Sharma says, “With more than 660,000 customers, 1,285 global patents and 50-plus enterprise cybersecurity products, Fortinet commands a significant presence in the cybersecurity field.
Where to Buy Cybersecurity ETFs
The top cybersecurity companies are working to mitigate those expenses. The future of cybersecurity is expected to be shaped by several key trends and developments. One of the most significant factors is the increase in cyber threats, as more and more business and personal https://bigbostrade.com/ activity move online. Cybercriminals are becoming more sophisticated and organized and are using various tactics to target individuals and organizations. This shift aims to enable them to remain relevant in an increasingly complex and dynamic security landscape.
- For the fourth quarter, CYBR revenues increased by 12% to $169.2 million.
- Palo Alto Networks has long been one of the best cyber securities stocks to watch.
- The fund managed $727 million of assets in early 2023 and has an expense ratio of 0.51%.
- This can be seen from the ransomware attacks, which first started in 1989.
- The cybersecurity companies shown below are all listed on the NASDAQ and NYSE, and had market caps of less than US$400 billion at the time of publication.
- A newcomer to the cybersecurity ETF space, the Global X Cybersecurity ETF (BUG -1.68%) launched at the end of 2019.
To see all exchange delays and terms of use please see Barchart’s disclaimer. Identity management is critical for ensuring that only authorized users have access to an organization’s resources. It typically involves using a central identities repository, such as an Active Directory or LDAP server, to manage user identities and access rights across an organization’s IT environment. Okta’s platform has the benefit for extension into new market categories, such as with SIEM (Security Information and Event Management).
Cybersecurity Stocks: Okta (OKTA)
Larry Ramer has conducted research and written articles on U.S. stocks for 15 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Among his highly successful, contrarian picks have been PLUG, XOM and solar stocks. And that trend is already playing out, as the company’s subscription annual recurring revenue soared 77% in Q2 versus the previous quarter. Year to date total return was 15.3% and the yield is 0.10%, with a net expense ratio of 0.47%. Top holdings include VMWare, Fortinet, Science Applications International, Palo Alto Networks and ZScaler.
In the latest quarter, Qualys posted revenues of $130.8 million, up 19% year-over-year, and net income of $28.3 million. The company has more than 10,000 customers, including 70% of the Forbes Global 100. Qualys (QLYS, $124.31) is a provider of a comprehensive suite of cloud-based security and compliance solutions. It manages all IT assets for any endpoint, whether on-premises, cloud or mobile. The system also helps to not only discover breaches, but to provide effective remediation actions.
However, the company has had to make tough transitions, such as migrating to the cloud. “I’ve spoken to dozens of customers and partners in the last few months, and they all face similar challenges,” said Udi Mokady, founder and CEO of CyberArk, on the latest earnings call. With Palo Alto Networks’ massive scale, the company is able to invest about $1 billion in research and development (R&D) each year. The R&D investments mean that the company has released a large number of updates, upgrades and new systems.
Also, Fortinet competes with Palo Alto Networks and others in the firewall security market. They block unauthorized traffic and check web applications for malware. Cybersecurity stocks got off to a rough start this earnings period when Fortinet (FTNT) reported results that missed on revenue and billings. But shares in Okta (OKTA), CrowdStrike Holdings (CRWD) and SentinelOne (S) rose on their earnings reports. Data analytics is a fast-growing segment of IT management, and Splunk is a central part of many organizations’ security and monitoring efforts.
Biggest Cybersecurity ETFs in 2022
Hence, it is set to continue its impressive sales growth streak and is confidently projecting a 22% three-year compound annual growth rate (CAGR) by 2025. In the fiscal second quarter ended Jan. 31, Zscaler reported revenues of $387.6 million, up 52% on a year-over-year basis. The company’s cash flows were $89.5 million and it had $1.9 billion in the bank. Founded 20 years ago, Splunk (SPLK, $89.26) is a pioneer of analyzing log data, which is information generated from IT systems like ERPs (enterprise resource planning).
Analysts say others to watch include Venafi, Recorded Future, Noname Security, Obsidian Security, Deep Instinct and Skyflow. The startups pressure incumbents into higher research and development spending. This form of ledger technology is what’s behind cryptocurrencies and other tech trends. This vast sector is composed of some of the most valuable companies in the world. Chris Markoch is a freelance financial copywriter who has been covering the market for seven years. To be completely transparent, Absolute leaves something to be desired financially.