3 Cybersecurity Stocks Poised for Long-Term Growth

Key Points

• CrowdStrike’s AI-first, cloud-native Falcon platform gives it a structural advantage over peers.
• Palo Alto is a leader but faces slower growth as it pivots from legacy products to the cloud.
• Fortinet’s hardware-heavy model may limit its long-term growth runway compared to pure-play cloud leaders.

Many investors are focused on the artificial intelligence (AI) trade for good reasons. This is the most significant technology transformation in 30 years, and it’s still in its early stages. However, cybersecurity stocks have also been strong performers in the tech sector, and AI is a big reason for this.

Three of the top names in this sector are CrowdStrike Holdings Inc. NASDAQ: CRWD, Palo Alto Networks Inc. NASDAQ: PANW, and Fortinet Inc. NASDAQ: FTNT. All of these companies are good stocks to own, which is why each one is included in the top industry ETFs. However, if you have to choose just one, CrowdStrike is best positioned for long-term growth.

A Must-Have Line Item on Every Balance Sheet

Cyberthreats have been a problem since the birth of the Internet. AI is changing both the volume and sophistication of those threats, particularly as more companies move their data to the cloud.

That changes the nature of the threat. It also changes how businesses respond to that threat. Cybersecurity is now a non-discretionary line item on every balance sheet.

However, while having cyber defense is not an option, companies do have options regarding how that defense is deployed. In general, this comes down to whether a company uses legacy hardware or adopts a cloud-native solution.

CrowdStrike Is the AI-First Cybersecurity Play

The single biggest advantage that CrowdStrike may enjoy in this sector is that its Falcon platform is cloud-native and AI-first. The platform provides 29 modules over three categories (Endpoint Security, Security and IT Operations, and Threat Intelligence). Companies choose the modules they use via the company’s Falcon Flex software-as-a-service (SaaS) model. Subscription sales now account for approximately 95% of CrowdStrike’s revenue.

In its second-quarter earnings report, CrowdStrike forecasted full-year revenue between $4.74 billion and $4.81 billion. At the low end of that forecast, the company would post year-over-year (YOY) revenue growth of 20%. That growth is occurring while the company is improving its margins.

Among these three stocks, CRWD stock comes at the highest premium, but its structural advantage (i.e, its cloud-native platform) makes it worth the high multiple.

Palo Alto: A Sector Leader Yet a Challenger Brand

Palo Alto Networks is one of the first names that comes to mind for many investors in the cybersecurity space.

As of Oct. 2, the company's market cap was over $138 billion, and its balance sheet has the firepower to allow it to migrate into the AI and cloud security space through a series of acquisitions.

That pivot is central to the company's platformization strategy.

The company now has three clearly defined business units:

• Strata – older, on-premise network security tools

• Prisma – cloud-based services

• Cortex – AI-powered threat detection tools.

In its fourth quarter and full-year 2025 earnings report, Palo Alto reported a 32% year-over-year increase in annual recurring revenue for next-gen security. Still, PANW stock is up 14% for the year, which slightly lags the S&P 500. That may be due to growth expectations. Palo Alto expects that total revenue growth in 2026 will come in around 14%, nearly identical to 2025, as contracts shorten and the company competes for cloud and AI adoption.

Fortinet Has a Niche That May Not Provide Enough Growth

Fortinet is an old-guard cybersecurity company that is best known for its firewall business, but has expanded into the cloud security arena through its FortiCloud platform, which has AI embedded into it. The company also develops its own proprietary chips which it claims allows it to address threats more efficiently than companies that use off-the-shelf chips.

Like Palo Alto, the issue is not one of growth; the company has generated over 14% year-over-year growth in its trailing 12-month period. The issue is at what pace they can continue growing. After the company’s last earnings report, some analysts are questioning how much time is left in the current firewall upgrade cycle. That could mean slower growth over the next several years, which could be a headwind for FTNT stock.