Best Cybersecurity Stocks Right Now

Cybersecurity could see a huge boom as more and more companies make their work-from-home operations permanent. Here are a few stocks that could benefit most.

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Contributor, Benzinga
March 2, 2024

Fortinet (NASDAQ:FTNT)

Fortinet is a cybersecurity vendor that sells products, support, and services to small and midsize businesses, enterprises, and government entities. Its products include unified threat management appliances, firewalls, network security, and its security platform, Security Fabric. Services revenue is primarily from FortiGuard security subscriptions and FortiCare technical support. At the end of 2021, products were 38% of revenue and services were 62% of sales. The California-based company sells products worldwide.

Last update: 7:58PM (Delayed 15-Minutes)
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Vol / Avg.4.841M / 6.844MMkt Cap53.725B
Day Range68.570 - 70.49052 Wk Range44.120 - 81.240

CrowdStrike Holdings (NASDAQ:CRWD)

CrowdStrike Holdings provides cybersecurity products and services aimed at protecting organizations from cyberthreats. It offers cloud-delivered protection across endpoints, cloud workloads, identity and data, and threat intelligence, managed security services, IT operations management, threat hunting, identity protection, and log management. CrowdStrike went public in 2019 and serves customers worldwide.

Last update: 7:55PM (Delayed 15-Minutes)
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Vol / Avg.5.837M / 3.421MMkt Cap75.405B
Day Range309.120 - 319.72052 Wk Range115.670 - 338.453

A10 Networks (NYSE:ATEN)

A10 Networks Inc is a provider of secure application solutions and services that enables a new generation of intelligently connected companies, the ability to continuously improve cyber protection and digital responsiveness across dynamic Information Technology and network infrastructures. Its portfolio consists of six secure application solutions; Thunder Application Delivery Controller, Lightning Application Delivery Controller, Thunder Carrier Grade Networking, Thunder Threat Protection System, Thunder SSL Insight and Thunder Convergent Firewall, and two intelligent management and automation tools; Harmony Controller and aGalaxy TPS. Key revenue is generated from the Americas, with the rest coming from Europe, the Middle East and Africa, plus the Asia Pacific region.

Last update: 5:45PM (Delayed 15-Minutes)
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Vol / Avg.572.994K / 696.298KMkt Cap1.015B
Day Range13.270 - 13.65052 Wk Range10.035 - 15.990

Zscaler (NASDAQ:ZS)

Zscaler is a security-as-a-service firm that offers its customers cloud-delivered solutions for protecting user devices and data. The firm leverages its position in 150 colocation data centers to deliver traditionally appliance-based security functionality, such as firewalls and sandboxes, as a completely cloud-native platform. The firm focuses on large enterprise customers and offers two primary product suites: Zscaler Internet Access, which securely connects users to externally managed application and websites (such as Salesforce and Google), and Zscaler Private Access, which securely connects users to internally managed applications. Both product suites encompass a broad gamut of capabilities situated across the traditional security stack.

Last update: 7:59PM (Delayed 15-Minutes)
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Vol / Avg.11.834M / 2.159MMkt Cap32.366B
Day Range215.000 - 227.30052 Wk Range84.930 - 259.610

Marvell Tech (NASDAQ:MRVL)

Marvell Technology Group Ltd. is a tech company and a pioneer in the digital storage industry. It is primarily focused on developing technology for storage, network infrastructure and wireless connectivity solutions. These solutions from Marvell Technology have transformed the enterprise, cloud, automotive, industrial and consumer markets.

The tech stock has a market cap of $30 billion and an EPS of $2.09. It has a 52-week low of $16.45 and a 52-week high of $46.03. Marvell Technology has an annual dividend yield of $0.24 per share. It has high liquidity and trades more than 3.8 billion shares per day. Marvell Technology has generated revenue of $2.8 billion in 2019.

Last update: 7:59PM (Delayed 15-Minutes)
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Vol / Avg.20.463M / 11.746MMkt Cap67.552B
Day Range73.460 - 78.09052 Wk Range36.640 - 73.530

Technology changes the world at a rapid pace and nowhere is that growth more evident than the cybersecurity sector. About 40 years ago, computer system security was a concern only of the largest corporations and governments. Now, every citizen with a smartphone needs some form of protection from malicious attacks, and most of the time they don’t even realize when an intrusion has been thwarted.

We have more data passing through more systems than ever. The internet has introduced many conveniences to our lives but has created some vulnerabilities to our personal information. Companies sprang to answer the call to curb and prevent security breaches — cybersecurity firms have grown a nonexistent sector into a multibillion business. And with COVID-19 looming over social and business activity for the foreseeable future, keeping digital assets secure becomes even more crucial.

Overview: Cybersecurity Stocks

Cybersecurity is a huge industry today, but the need for it was nonexistent until the 1970s. Back during the days of the ARPANET (the predecessor of the Internet), a programmer named Bob Thomas made a discovery. He realized he could use a computer program to spread from system to system within the network, accessing any terminal he wanted. Thomas had no sinister intent with his program — it simply posted a message on other computers saying, “I’M THE CREEPER. CATCH ME IF YOU CAN.”

The Creeper was eventually caught by the Reaper. Reaper was the original antivirus program, written by Ray Tomlinson and given the directive of finding and deleting the Creeper program. Thus, the cybersecurity field was born. But the attacks soon became much more malicious.

The first denial-of-service (DoS) attack happened in 1988, from a code written by MIT graduate student Robert Morris. Morris’s computer worm tore through college computer systems, creating massive slowdowns and crippling the newborn internet. The code replicated uncontrollably, although it didn’t contain any harmful instructions or do damage to files. 

Morris’s objective remains ambiguous (some sources theorize the code was released entirely by accident), but the internet slowdowns did cause monetary damage and Morris was tried and convicted under the Computer Fraud and Abuse Act. However, the Morris worm paved the way for many of today’s most malignant viruses and malware.

Today, cybersecurity is more important than ever because attackers are getting more and more clever. Both federal offices and private companies like Target, Equifax and Yahoo have been hacked and millions of people have had their personal information exposed. Ransomware attacks like the WannaCry virus are particularly nefarious since they basically hold computer systems hostage for payment. New threats are always lurking.

The cybersecurity industry is currently a multibillion market and is expected to grow to $270 billion and beyond by 2026. Plus, advances in AI development should speed up the efficiency and implementation of cybersecurity systems. Investing in cybersecurity firms seems like a slam dunk, but you still need to pick good companies. Like any market sector, the most profitable business models can still be sunk by bad management and excessive debt.

Best Online Brokers for Cybersecurity Stocks

Choosing the best broker for your trading style is an important step for any investor. Buy-and-hold investors and swing traders benefit from commission-free online brokers because trades no longer cost $5 to $7 a pop and order routing doesn’t matter as much when you’re holding overnight.  

Day traders who use sophisticated techniques might prefer direct access brokers that charge commissions per share. If you need pricing down the penny, you’ll want control over your order trajectory — that requires direct access, not a broker with a trading desk.

Features to Look for in Cybersecurity Stocks

Choosing the best cybersecurity stocks for your portfolio doesn’t require much of a changeup from the usual program. You’re looking for companies that are growing revenue and improving margins without piling on the debt. But keep in mind the nature of the cybersecurity industry, too — running with the hackers requires diligent work.

  • Revenue growth: Most of us think cybersecurity is the virus-protection program on our laptops or the 256-bit encryption of data we enter into our phones. But cybersecurity comes in all shapes and sizes, and most firms have a diverse list of public and private clients. The best stocks in the sector will be revenue growers.
  • Improving margins: Look for cybersecurity stocks that are improving their profit margins. Net profit margin refers to the portion of revenue that a publicly-traded company keeps after expenses.
  • Dedication to innovation: Hackers and cyber thieves are crafty. Cybersecurity companies need to be constantly innovating and updating their platforms to keep up with the latest threats. Stagnation is death in this sector.

Cybersecurity Might Deserve a Slice of Your Portfolio

The economy is going online, at least for the time being. Businesses will continue to keep as many workers operating from home as possible during the pandemic, which will improve their personal health but possibly not the health of their devices. There’s more data than ever and hackers have more opportunities to exploit weaknesses in our computer security systems.

Spending on cybersecurity will inevitably increase. Keeping an eye on current trends is important when following this sector as new threats are constantly emerging. Be sure to research how each company plans on staying ahead of the curve before investing in their stock.

Ready to start investing in cybersecurity stocks? Check out other ways to invest in the technology sector, the best tech stocks and our picks for the best online brokerage.

About Dan Schmidt

Dan Schmidt is a finance writer passionate about helping readers understand how assets and markets work. He has over six years of writing experience, focused on stocks. His work has been published by Vanguard, Capital One, PenFed Credit Union, MarketBeat, and Fora Financial. Dan lives in Bucks County, PA with his wife and enjoys summers at Citizens Bank Park cheering on the Phillies.