The cybersecurity industry has experienced rapid growth as hacking attempts become more frequent. Gartner forecasts global spending on cybersecurity to reach $215 million by 2024. That represents about a 14.3% increase from estimated 2023 spending levels, with no end in sight. For investors, this presents an opportunity to buy into cybersecurity stocks early. 

Cybersecurity spending is growing at two to three times the rate of IT spending. As digital transformation accelerates across industries, cybersecurity is becoming a mandatory line item for enterprise IT budgets. So, let’s explore the top three potentially profitable cybersecurity stocks as long-term investments. 

Palo Alto Networks (PANW)

A pioneer in cybersecurity, the first stock on this list is Palo Alto Networks (NASDAQ:PANW). It has been around for over 18 years, headquartered in California, and is now valued at roughly $95 billion. The company provides cybersecurity products and services to organizations globally.

For example, Palo Alto offers firewall hardware and software to protect networks and a network security management platform called Panorama. Additionally, they have subscription services for threat prevention, malware protection, URL filtering, mobile device security, DNS protection, and more. 

Recently, Palo Alto Networks acquired Dig Security, further fortifying its Prisma Cloud platform and enhancing its data security capabilities. This deal allows the company to provide more solutions for complex cloud environments, increasing the service quality and overall value.

PANW announced financial results for the first fiscal quarter of the year 2024. The company saw strong growth, with total revenue coming in at $1.9 billion, up 20% in the same quarter last year. GAAP net income was $194.2 million, nearly 10x higher than $20 million year over year (YOY). Also, analysts rate it a strong buy with a high price estimate of $400. That shows about 30% upside potential from its current price. Also, it underscores the fact that PANW is a cybersecurity stock to buy. 

CrowdStrike Holdings (CRWD)

Texas-based CrowdStrike Holdings (NASDAQ:CRWD) has been around for over 12 years and has $62.4 billion market cap.

The company provides cloud-based security services for devices, cloud computing, identity management, and data protection. Their main product is the Falcon platform. This offers services like corporate workload monitoring, vulnerability assessments, managed security, and more related to cybersecurity. 

Forrester Research has recently recognized Crowdstrike as a leader in management detection and response services in Europe. This achievement will likely further solidify the company’s position in the cybersecurity market. 

CrowdStrike delivered Q4 results with 48% YOY growth in revenue to $637.3 million and 48% growth in subscription revenue to $598.3 million. Gross margins declined slightly compared to last year, but CRWD is still on an excellent footing, with EPS beating analyst estimates by 77.78%. The company reported a GAAP net loss of $47 million due to stock-based compensation and other expenses.

However, it earned $112 million in net income on a non-GAAP basis, representing $0.47 in diluted earnings per share. On top of that, analysts rated CRWD a strong buy with a high price target of $330, which means 26% upside potential from the current price.

Zscaler, Inc. (ZS)

Zscaler, Inc. (NASDAQ:ZS) is a California-based cloud security company founded in 2007. Formerly known as SafeChannel, it officially changed its name in 2008.

Today, the company is valued at nearly $31 billion and continues to provide cloud-based security solutions worldwide. Zscaler assists companies in securely accessing software applications and internet destinations. Additionally, they measure end-user digital experiences across business apps, and identifying misconfigurations that create risk.

ZS reported strong financial growth in Q4 of 2023, with revenue of $455 million, up 43% from last year. Meanwhile, the reported EPS was -$0.18, which exceeded expectations by 37.93%. Operations cash flow was solid at $135.9 million, while deferred revenue also grew 41% to $1.44 billion.

Analysts rate ZA as a strong buy with a high price target of $275, which works out to about a 24% upside potential from its current price. This makes ZS a strong contender for some of the best cybersecurity stocks to buy.

On the date of publication, Rick Orford 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.