Wagering on the best cybersecurity stocks is more relevant than ever, given the surge in cyberattacks impacting major corporations.
The breach of UnitedHealth (NYSE:UNH) will probably be one of the most significant cybersecurity incidents in recent memory. To mitigate the damage, UNH had to pay $22 million in ransom, materially weighing down its bottom line. Moreover, the firm spends over $870 million annually on cybersecurity, a figure that should continue climbing in the coming years. Similarly, Microsoft Azure also experienced a major breach that compromised the accounts of hundreds of senior executives.
Hence, these high-profile breaches underscore the importance of robust cybersecurity solutions. That said, here are three of the best cybersecurity stocks to buy, offering mission-critical security solutions. These businesses have grown rapidly in recent years and are poised to continue their fine form for the foreseeable future. As we look ahead, the UNH incident will only add more fuel to the fire, igniting robust gains for these stocks.
Best Cybersecurity Stocks to Buy: Okta (OKTA)
Okta’s (NASDAQ:OKTA) robust cloud software secures user authentication across various applications and devices. With 80% of data breaches involving compromised identities, Okta plays a critical role in dealing with identity attacks and safeguarding digital access points.
Over the years, it has been one of the most consistent players in its niche. Considering its beaten estimates across both lines in the past 16 consecutive quarters, it hasn’t given much wiggle room to the bears. Moreover, its first-quarter (Q1) 2025 report posted another handsome top-line beat while growing sales by 19.1% year-over-year (YOY) to $617 million. Also, its 65 cents EPS comfortably beat estimates by 10 cents.
As we look ahead, investors are eyeing a solid Q2 marked by healthy operating margins projected at 19% to 20% while anticipating a 12% annual increase in total sales for the fiscal year. Moreover, with a robust $1.2 billion net cash position, the firm is well-equipped to fuel future organic growth.
Furthermore, Okta stock is currently 22% behind its 52-week high of $114.5. Despite a 35% surge last year, it’s currently trailing 5% this month, making it an opportune moment to buy it on the dip.
Fortinet (FTNT)
Fortinet (NASDAQ:FTNT) shines as a top player in the cybersecurity sphere, buoyed by secular trends and a stellar operational track record. It stands out from its peers, with its tentacles spread across three major growth areas, including Network Security, Secure Access Service Edge (SASE) and Security Operations. Moreover, it boasts a leadership position in cutting-edge firewall technology and affirms its position as a giant in its niche.
Furthermore, the firm has grown its free cash flows by over 22% over the past five years. Consequently, its stock has followed, jumping over 289% in value and more than 21% in the past three years. While revenue growth has cooled from its previous highs, it’s set for robust growth in the upcoming quarters. It’s expected to generate $5.80 billion this year, a 9.4% increase compared to the previous year, followed by $6.55 billion in 2025.
Cloudflare (NET)
Cloudflare (NYSE:NET) stands out as another top cybersecurity play that effectively layers advanced AI and machine learning algorithms for real-time threat detection and mitigation. Moreover, the firm’s innovative DNA and strategic partnerships continue to add value to its robust solutions. As businesses continue migrating to cloud-based infrastructures, Cloudflare’s versatile AI-driven cybersecurity offerings position it for substantial long-term expansion.
Recent quarterlies have been excellent, with its Q1 report underscoring the success of its AI-integrated offerings. Q1 revenue jumped 30% year-over-year to $378.6 million, with its non-GAAP EPS of 16 cents beating estimates by 3 cents. To put things in perspective, Cloudflare has consistently hit or exceeded earnings expectations every quarter since the third quarter (Q3) of 2019.
Moreover, the firm projects Q2 revenue between $393.5 million and $394.5 million, maintaining its upward trajectory. Also, Wall Street analysts expect an 11% upside in NET stock from current levels, rating it as a Moderate Buy.
Hence, with strong financial performance and high customer satisfaction, Cloudflare remains an excellent long-term cybersecurity pick. Given its promising prospects, Cloudflare stands to gain immensely from its exposure to the growing demand for powerful AI-powered cybersecurity solutions.
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.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
