Businesses are looking to ensure the safety of their data, employees and critical assets. Thus, protection against cyber threats, such as hacking or data breaches, is critical for companies. The Covid-induced push toward digitization has therefore made cybersecurity stocks more appealing.

Recently, many enterprises have also shifted to a hybrid work arrangement, and the structure exposes enterprises to more sophisticated risks. The number of cyberattacks is on the rise, meaning businesses and governments must invest heavily in the sector. This creates a solid tailwind for related stocks.

Cybersecurity is a rapidly-evolving industry. Next-generation security software will be needed to keep up with the increasing threat landscape, and it’s primed for growth over the next decade, thanks in large part to these cutting-edge tools from cloud-native cybersecurity companies.

In 2020, the cybersecurity market was worth more than $156 billion. That value is expected to reach a whopping $352 billion by 2026 with an annual growth rate of 14% over five years. These cybersecurity stocks are poised to benefit:

• CrowdStrike (NASDAQ:CRWD)
• Palantir Technologies (NYSE:PLTR)
• Fortinet (NASDAQ:FTNT)
• Okta (NASDAQ:OKTA)
• Cloudflare (NYSE:NET)
• Palo Alto Networks (NYSE:PANW)
• SentinelOne (NYSE:S)

Cybersecurity Stocks: CrowdStrike (CRWD)

Crowdstrike is an expert in endpoint security, providing robust protection to devices users access through various networks. When an attack occurs on a particular device, the information about the incident is sent to other devices and other enterprises.

Consequently, the company’s attack resiliency gets stronger over time as it adds more customers. Crowdstrike has been recognized as a global leader in the cybersecurity realm by top consulting firm Gartner, ahead of its competition.

Business has been great of late for the company. It recently reported a 70% bump in revenues from the prior-year period during the second quarter. Its annual recurring revenues shot up to a mammoth $1.34 billion as Crowdstrike grew its customer base by 81%. Therefore, CRWD stock has a strong growth runway ahead.

Palantir Technologies (PLTR)

Palantir Technologies is not exactly a cybersecurity pure-play. The big data analytics company enables government and private sector businesses to analyze and manage vast amounts of data.

However, businesses face complicated problems like security breaches that require sophisticated solutions. Palantir offers secure datasets, giving it an edge over its peers.

The firm has been adding new customers aggressively with every passing quarter and projects strong growth for the foreseeable future. In its third-quarter this year, revenue has risen by 36% to $392 million. Moreover, its U.S. commercial sales grew 103% from the prior year.

Though its government business was a catalyst in the past, its commercial business is now a bigger growth driver. Moreover, PLTR stock’s current valuation is considerably high, but it will grow into its valuation in time.

Cybersecurity Stocks: Fortinet (FTNT)

Fortinet is one of the top legacy security software providers in the world. It boasts industry-leading financials with robust operating and cash flow margins.

Moreover, the company continues to invest in the organic development of its security platforms to remain competitive. Its Fortinet Security Fabric architecture can deliver without hiccups to more than 500,000 customers for even the most challenging issues.

Fortinet recently reported its third-quarter results, which comfortably beat analyst estimates on both lines. Revenues improved by 33% from the prior-year period to $867 million, with a massive 51% increase in product sales.

Service and billings revenues rose 24% and 42%, respectively. Gross margins for the company remain at a solid 77%, and the company’s FCF margin is 38%. Hence, Fortinet and FTNT stock represent the cream of the crop in the cybersecurity sector.

Okta (OKTA)

Okta utilizes a “zero-trust” approach with its architecture, which requires constant verification before a user can access data and applications. The company is one of the first-movers in identity and access management services.

In a world where cloud and mobile services have become the norm, Okta’s software offerings have been highly demanded by clients across the globe.

Okta has performed incredibly well over the past several years, growing its top-line by double-digits. In its second quarter this year, revenue grew by 57% and Okta forecasts 50% growth next year. Moreover, its adjusted loss per share is steadily improving.

On top of that, the company is making pertinent acquisitions to expand its market share further. Though OKTA stock has been on a negative streak of late, it is a cybersecurity stock for the long haul.

Stocks to Buy: Cloudflare (NET)

Cloudflare is a network services and technology infrastructure platform that offers a suite of products to meet the digital needs of various enterprises.

The Cloudflare network provides consistency, reliability and security for its customers. The rising digitization trends in work, communications and entertainment will see the company benefit from solving different challenges for its clients.

Cloudflare has been a star performer over the past several years, with a five-year average revenue growth rate of roughly 50.5%. Moreover, it recently posted its third-quarter results, showing sales grew 51% from the same period last year.

Management projects the company will close out the year with $648 million in revenues. More importantly, its large base of customers that spend more than $100,000 annually rose 71% from the prior-year quarter. NET stock is expensive, but it’s well worth the premium cost given its solid track record and outlook.

Palo Alto Networks (PANW)

Palo Alto’s specialty is its best-in-class firewall service. It has been named as a top firewall provider by Gartner for a decade.

Over the past few years, the company has been expanding its portfolio of security services, including its Cortex threat detection platform and Prisma cloud security platform. Moreover, its profitable platform has enabled it to acquire several cloud-native businesses to expand its share in the sector.

In fiscal 2021, Palo’s next-generation sequencing (NGS) services made a colossal $1.18 billion in annual recurring revenues. The increase was complemented by healthy growth in its other services, leading to an overall 25% rise in revenue for the whole year.

As it stands, the company serves more than 80,000 customers in comparison to 9,000 customers in 2012. It expects sales to grow by more than 25% in fiscal 2022, boosting PANW stock.

Cybersecurity Stocks: SentinelOne (NYSE:S)

SentinelOne is an endpoint security platform that recently has the largest-ever initial public offering (IPO) for a cybersecurity firm. It raised $1.2 billion in cash during its IPO in June 2021.

The pure-play cybersecurity company more than doubled its sales during pandemic-ridden 2020. Its robust artificial intelligence (AI) platform produces the most effective endpoint security solution on the market at this time.

Revenues in its most recent quarter doubled to $45.8 million compared to the same quarter last year. Moreover, its annualized recurring revenue growth accelerated 127% from the prior-year period in the second quarter.

Total customer count also improved by more than 75% during the quarter, with adjusted gross margins over 60%. Investors have concerns about S stock’s valuation at this time, but based on its incredible outlook, it’s well worth the investment.

On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.