10 Best Cybersecurity Stocks to Buy According to Short Sellers

In this article, we take a look at the 10 Best Cybersecurity Stocks to Buy According to Short Sellers.

On May 7, the International Monetary Fund (IMF) emphasized the growing risks to financial stability amid the potential of artificial intelligence (AI) to fuel cyberattacks. It explained that while AI is transforming how the financial system addresses vulnerabilities and responds to incidents, it is also amplifying cyber threats that can undermine financial stability when intruders’ offensive capabilities outpace defenses.

The IMF said financial systems depend on highly interconnected, shared digital infrastructure, including software, cloud services, and networks for payments and other data. It emphasized that advanced AI models can lessen the time and cost needed to identify and exploit vulnerabilities. This raises the likelihood of simultaneously discovering and targeting weaknesses in widely used systems.

The global organization cited Anthropic’s recent controlled release of its Claude Mythos Preview, an advanced AI model with exceptional cyber capabilities, as an example of how quickly risks are increasing. It further explained:

“Mythos could find and exploit vulnerabilities in every major operating system and web browser—even when used by non-experts. This foreshadows how fast‑moving, AI‑driven cyber risks could destabilize the financial system if not managed carefully, and why authorities must focus on building resilience through supervision and coordination—rather than treating these developments as purely technical or operational issues.”

“On the other hand, OpenAI’s specialized, restricted cyber version of GPT‑5.5 assumes vulnerabilities and attacks will grow, and emphasizes equipping defenders more quickly and at scale, under appropriate governance and trusted access models,” it added.

The IMF emphasized the need for a policy response that treats cybersecurity as a core financial stability issue, noting that existing measures must be expanded and sharpened amid increasingly sophisticated attacks. It urged policymakers to prioritize robust resilience standards, supervision focused on systemic transmission channels, and close public-private collaboration on threat intelligence and incident response.

Moreover, the IMF said the Mythos episode highlights governance challenges and emphasizes the need for strong global coordination. It added:

“Emerging and developing economies, which often have more severe resource constraints, may be disproportionately exposed to attackers targeting regions with weaker defenses. That’s why stronger international coordination, more information sharing, and expanded capacity development are critical to preserving global financial stability. As AI reshapes the cyber landscape, the central question for authorities is whether the financial system can continue to function under severe stress. Answering that question requires putting systemic risk—and the tools to manage it—at the center of the AI‑cyber conversation.”

As we consider this development, let’s take a look at the 10 Best Cybersecurity Stocks to Buy According to Short Sellers.

Our Methodology

To compile this list, we shortlisted cybersecurity companies using the Finviz screeners. Next, we listed the short percentage of float for all the companies. From this pool, we ranked the stocks based on their short float percentage, from highest to lowest. Additionally, we also included the number of hedge funds holding stakes in these companies as of the fourth quarter of 2025.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research shows we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).

Note: All pricing data is as of market close on May 25, 2026.

10. SailPoint, Inc. (NASDAQ:SAIL)

Short float: 21.30%

Number of Hedge Fund Holders: 26

SailPoint, Inc. (NASDAQ:SAIL) is one of the 10 Best Cybersecurity Stocks to Buy According to Short Sellers. On May 21, the company introduced a new SailPoint Claude Compliance API connector, which provides essential visibility and governance needed by Claude Enterprise organizations to secure access to and usage of AI platforms across the enterprise.

The company said the integration addresses the critical need for robust identity security over the expanding AI landscape as more companies adopt AI tools to accelerate business innovation. It added that the connector extends SailPoint’s enterprise-grade identity security to Anthropic’s Claude Enterprise, enabling organizations to confidently adopt AI while maintaining stringent security and compliance standards.

On May 20, Roth Capital initiated its coverage of SailPoint, assigning the stock a Buy rating and a $19 price target, according to a report by TheFly. The analyst emphasized that the company is well-positioned for long-term growth as it estimates the company’s addressable market at $55B versus a current run-rate of $1B in annual recurring revenue. Moreover, it described the company’s outlook as conservative.

SailPoint, Inc. (NASDAQ:SAIL) is a company that provides a comprehensive identity security platform for enterprises. Its solutions enable organizations to establish, control, and automate policies that help them define and maintain a robust security posture and achieve regulatory compliance.

9. Tenable Holdings, Inc. (NASDAQ:TENB)

Short float:13.19%

Number of Hedge Fund Holders: 40

Tenable Holdings, Inc. (NASDAQ:TENB) is one of the 10 Best Cybersecurity Stocks to Buy According to Short Sellers. On May 22, Needham raised its price target on Tenable to $30 from $26 while maintaining a Buy rating on the stock following the company’s Investor Day presentation on May 21, according to a report by TheFly.

The analyst highlighted the company’s 2029 target model, which assumes high single-digit to low double-digit year-on-year revenue growth alongside free cash flow margin expansion. Additionally, Needham also cited the company’s strides in expanding its portfolio as well as selling the vision of exposure management to customers.

Similarly, DA Davidson also raised its price target on Tenable to $25 from $22 and maintained a Neutral rating on the shares following the company’s Investor Day presentation. It highlighted the company’s Tenable One platform, noting that it provides customers with a holistic exposure management solution that helps prioritize and remediate exposures at machine speed.

During the company’s Investor Day presentation, Tenable launched the Tenable Open Partner Exchange Network (OPEN), an upgrade of its technology partner ecosystem, which is designed to help organizations unify security data, accelerate AI-driven workflows, and operationalize exposure management across their existing technology stack.

“As AI accelerates the speed and scale of cyber threats, security teams are struggling with fragmented tools, disconnected workflows, and growing operational complexity. Tenable OPEN extends the power of the Tenable One Exposure Management Platform through an open ecosystem of integrations, data exchange, and orchestration capabilities that help organizations reduce cyber risk faster,” Tenable said.

Tenable Holdings, Inc. (NASDAQ:TENB) offers an AI-powered exposure management platform designed to expose and close cybersecurity gaps that erode business value, reputation, and trust.

8. Rapid7, Inc. (NASDAQ:RPD)

Short float:11.78%

Number of Hedge Fund Holders: 27

Rapid7, Inc. (NASDAQ:RPD) is one of the 10 Best Cybersecurity Stocks to Buy According to Short Sellers. On May 21, the company unveiled its Q1 2026 Threat Landscape Report, which examined trends in vulnerability exploitation, ransomware activity, and cybercriminal infrastructure. The report found that vulnerability exploitation accounted for 38% of incident response cases during the period. Rapid7 said this shift reflects how AI is accelerating the speed at which attackers can identify, weaponize, and exploit unpatched systems at scale, compressing defenders’ response time.

Earlier this month, on May 7, Barclays lowered its price target on Rapid7 and maintained an Underweight rating on the shares following the company’s Q1 earnings report. It attributed the reduced price target to the company’s lower-than-expected Q2 annual recurring revenue (ARR) guidance.

For the second quarter of the year, Rapid7 is projecting ARR to reach approximately $820 million. In the first quarter of the year, the company registered an ARR of $832 million, a decrease of 0.6% year-over-year.

Rapid7, Inc. (NASDAQ:RPD) is engaged in AI-powered managed cybersecurity operations. The company’s Rapid7 Command Platform integrates security data, enriching it with AI, threat intelligence, and innovation to reduce risk and disrupt attackers.

7. Zscaler, Inc. (NASDAQ:ZS)

Short float:9.79%

Number of Hedge Fund Holders: 56

Zscaler, Inc. (NASDAQ:ZS) is one of the 10 Best Cybersecurity Stocks to Buy According to Short Sellers. According to a report by TheFly on May 22, B. Riley upgraded its rating on Zscaler to Buy from Neutral while lowering its price target to $225 from $275. The analyst attributed the upgraded rating to the company’s product line expansion and AI tailwinds.

Additionally, the analyst views demand for secure network access as “healthy.” In contrast, B. Riley said the lower price target reflects a reduction in software multiples in recent months.

On May 21, Zscaler announced its intent to acquire Symmetry Systems, Inc. in a bid to map and secure AI Agent Communication. The company emphasized that Symmetry Systems’ access graphs provide the foundational visibility security teams need to govern AI agent communication with applications, data, and one another at scale. It added:

“The access graph works by ingesting enterprise-wide access logs from SaaS applications, public cloud services, data stores, and AI systems, using AI to correlate them into an access graph displaying which identities are accessing which data and how. Combined with the Zscaler Zero Trust Exchange platform, this visibility will become the foundation security teams use to build and enforce the policies governing how AI agents communicate with applications, data, and one another.”

Zscaler, Inc. (NASDAQ:ZS) is a cloud-based enterprise security provider that helps global businesses adopt zero trust for secure digital transformation.

6. SentinelOne, Inc. (NYSE:S)

Short float:7.55%

Number of Hedge Fund Holders: 37

SentinelOne, Inc. (NYSE:S) is one of the 10 Best Cybersecurity Stocks to Buy According to Short Sellers. On May 21, Oppenheimer analyst Ittai Kidron raised the price target on SentinelOne to $21 from $18 while maintaining an Outperform rating on the stock, according to a report by TheFly.

Oppenheimer expressed a conservative stance for SentinelOne’s upcoming earnings report to be released this week, noting that it expects the company to report slight upside versus consensus’ Q1 2027 revenue estimates. Based on its quarterly checks, Oppenheimer noted the company’s improving sales execution and above-plan performance with traction across PurpleAI and Singularity SIEM products.

In late April, SentinelOne launched a new offering called Wayfinder Frontier AI Services, which combines frontier AI models with elite human experts to uncover threats and break real-world exploitation chains. Initially pairing Anthropic’s Claude Security with SentinelOne’s offensive and defensive experts, the new service aims to deliver continuous, intelligence-led discovery, prioritization, and guide remediations across the customer’s full attack surface.

SentinelOne, Inc. (NYSE:S) is an AI security firm offering a platform that delivers unified coverage across endpoints, identity, cloud, and AI.

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