Best Cybersecurity Stocks in 2021

The case for cybersecurity stocks is almost self-evident at this point. Bad actors are everywhere. High-profile hacks occur on a regular basis. And with more and more activity moving to cloud-based hosting, the need for security becomes increasingly paramount. That makes cybersecurity stocks look set for years of growth ahead, making them one of the most attractive sectors in the market.

Frequently Asked Questions

What Are the Best Cybersecurity Stocks?

There are two types of strong cybersecurity stocks to own. On one hand are the blue-chip companies, such as Cisco Systems (NASDAQ:CSCO) and Palo Alto Networks (NYSE:PANW), that run the backbone of today’s online world. These companies might not outpace industry growth by much, but their stability makes them winning investments among the cybersecurity plays.

On the other hand, there are fast-growing companies like Palantir Technologies (NYSE:PLTR) and CrowdStrike (NASDAQ:CRWD). These platform-based companies use standardized platforms to provide enterprise clients with world-class security solutions.

How Do I Invest in Cybersecurity Stocks?

One attractive aspect of cybersecurity stocks is that investors have multiple options depending on their risk tolerance. And while the bigger players offer large upsides, smaller companies could grow even faster in relative terms.

Okta (NASDAQ:OKTA) focuses on identity management to prevent unauthorized access; CyberArk Software (NASDAQ:CYBR) attacks similar threats in a different way. Zscaler (NASDAQ:ZS) offers protection across public and private networks.

Even traditional companies are jumping in. BlackBerry (NYSE:BB) has shed its phone business but is using its long-held reputation as a security leader to establish itself as a key player in software and consulting. Former growth darling FireEye (NASDAQ:FEYE) is looking to execute a turnaround as it too tries to pivot to a cloud-based offering.

When Should I Buy Cybersecurity Stocks?

Cybersecurity stocks should be on every investor’s radar already. The trends driving demand aren’t going anywhere.

Those looking to time the market will need to consider the risks involved. Cybersecurity stocks typically fall after a major security breach or earnings miss, but these can signal more troubles ahead.

But longer-term investors might consider cost-averaging instead. When buying fast-growing, volatile companies like Fortinet (NASDAQ:FTNT) or security-as-a-service provider Proofpoint (NASDAQ:PFPT), it’s hard to pick the bottom of the market.

To be sure, not all cybersecurity stocks are going to be winners. The group as a whole, however, given the growing demand for services, is likely to do quite well. Investors can be patient and pick their preferred choices at their preferred price. But they shouldn’t wait too long.

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