7 Cybersecurity Investments to Protect Your Portfolio, Your Data

CrowdStrike Holdings Inc. (NASDAQ: CRWD) has been in business since 2011, but it’s already become one of the leading names in the sector. The company’s cloud-first Falcon platform allows customers to tap into an a la carte menu of nine modules that they can tailor to their businesses' needs. Because the platform is AI-native, it helps use AI to thwart incoming threats launched by AI.  

In its earnings presentation for the second quarter of the 2025 fiscal year, CrowdStrike reported that 48% of its customers were using eight or more of the Falcon modules. And that’s even after the high-profile faulty software update in July 2024. However, CrowdStrike made an “apology tour” and offered customers some of its Falcon services for free. 

Those compensation packages are rolling off in 2025, but the company is forecasting that many customers will now choose to pay for the services they were using.  

Palo Alto Networks (NASDAQ: PANW) is the largest of the cybersecurity stocks in this presentation by market cap. It’s also been profitable since 2023, which is not something that others in the space can say.  

Palo Alto’s services are lumped into three categories: Strata, which covers firewalls and network security services; Prisma, which is for its cloud-based services; and Cortex, which is its newest offering, which handles AI-powered threats. 

In 2024, the company moved to a platformization strategy that allows customers to bundle one or more tools among Palo Alto’s platforms. This is likely to help Palo Alto protect its market share from nimble competitors. The shift didn’t impact the company’s revenue and earnings, which were both up year over year (YoY). In fact, in the ten years ending July 2024, Palo Alto has increased its revenue at a compound annual growth rate (CAGR) of approximately 30%.  

The next group of cybersecurity stocks showcases a specific sector niche. For example, Fortinet Inc. (NASDAQ: FTNT) is a leader in firewall hardware.  

These firewalls aren’t like the ones of years past. Fortinet is the only company using application-specific integrated circuits (ASICs) to build its physical firewalls. It also offers software that runs on top of this hardware. 

This is all part of Fortinet’s strategy of holistically examining a business. This means examining a company’s different divisions and/or systems as one enterprise. Its FortiASIC technology is one reason the company had over 50% of that market based on units shipped in 2024.  

Like Palo Alto, the company has logged approximately 30% YoY revenue growth dating back to 2019. However, whereas Palo Alto’s number of shares outstanding increased by nearly 15%, Fortinet has lowered its share count by 5%. Combined with a forward P/E ratio that’s “only” in the 40x range, FTNT stock may offer better value for investors.

Okta Inc. (NASDAQ: OKTA) is the recognized leader in identity and access management (IAM), which is rooted in zero-trust technology. The premise is that Okta’s platform assumes everyone who is trying to access a company’s network has malicious intent until they can verify that they are not. Okta’s IAM systems allow only authorized people access to sensitive systems. 

This has taken on added significance to businesses that are relying increasingly on remote workers since 2020. That increases the threat layers to an enterprise and increases the visibility of Okta’s products and services.  

Okta’s topline is growing nicely year over year. However, as of April 2025, the company is not consistently profitable. At a time of market volatility, that may turn away some investors. However, analysts have a favorable view of the stock. The MarketBeat list of analyst upgrades shows OKTA stock as the stock with the most upgrades in March 2025.  

SentinelOne Inc. (NYSE: S) is one of the newer companies in this space, having been founded in 2019. This is a mid-cap company with a market cap of just over $5 billion as of April 2025. The company started out with an exclusive focus on end-point security. However, it has built out its range of services and in its most recent quarter, over 50% of the company’s revenue came from solutions that were unrelated to endpoint.  

SentinelOne was also the first company to offer generative AI (genAI) solutions to combat the threat of AI attacks. As noted in their descriptions, larger players in this sector have added AI offerings. But in the technology sector, particularly with software stocks, an 11-month lead can be enough to get SentinelOne rooted with its customers.  

SentinelOne is growing its top line on a YoY basis, but it’s not yet profitable and is not forecasting that for next year. That said, risk-tolerant investors looking for a higher risk/.reward in the sector may find S stock to be an attractive choice. 

As its name suggests, Cloudflare Inc. (NYSE: NET) is a leader in cloud-based cybersecurity. The company offers a fully integrated cloud-based security platform. Cloudflare’s platform can also help accelerate the performance of its customer’s websites and communications systems.  

The company’s goal is to help build a better internet. To that end, it added 114 startups to its platform in the last year. In April 2025, Cloudflare announced the launch of new offerings that will accelerate the development of AI agents using the company’s industry-first Model Context Protocol server. The company has also developed Workers VPC and VPC Private Link, which allow developers to build secure cross-cloud applications using their preferred platform.  

Unlike some companies in this space, over 50% of Cloudflare’s revenue comes from outside the United States. However, like many names in this space, the company’s solid topline growth is not translating into positive earnings, at least not yet.  

If you're looking to invest in cybersecurity stocks but prefer the diversification of stock ownership, consider an exchange-traded fund (ETF) to help reduce the risks associated with investing in individual stocks.In the iShares Cybersecurity and Tech ETF (NYSEARCA: IHAK). As of April 2025, the fund had $896.75 million of assets under management (AUM). 

The fund was launched by BlackRock in 2019 and tracks a market-cap-selected and weighted index of large—and mid-cap stocks of companies in the cybersecurity sector. No fund has more than 5.4% of the weighting in the index.  

 A low expense ratio (0.47% as of April 2025) attracts many investors to the fund, helping mitigate any risk from investing in volatile stocks. Although about 68% of the fund’s holdings are of U.S. companies, the fund does provide broad international exposure.