Cybersecurity is entering a critical new phase as artificial intelligence transforms how businesses operate — and how attackers exploit vulnerabilities. In a recent interview with CNBC, Palo Alto Networks CEO Nikesh Arora called this a “perfect time” for security companies, pointing to an inflection point in enterprise adoption of AI. “Even the naysayers are moving their data to the cloud,” Arora said, noting that tech giants are expected to spend over $300 billion on data centers this year — an investment wave that makes cybersecurity a central concern.

As AI agents begin taking on real operational autonomy — running manufacturing systems, customer service, and logistics — the threat landscape evolves rapidly. “Eventually, you’re going to have to give these agents true agency,” Arora warned, raising concerns that such systems could be hijacked if not properly secured. With AI and cloud infrastructure converging, cybersecurity is no longer optional — it’s foundational.

Even with economic headwinds and geopolitical uncertainty, Arora emphasized the strength of Palo Alto Networks’ results, calling them “phenomenal” under the circumstances. Against this backdrop, investors looking to gain exposure to this high-stakes sector may want to consider these 12 cybersecurity stocks poised to benefit from the AI revolution and the expanding need for digital defense.

Our Methodology

To compile the list of 12 best cybersecurity stocks to buy now, we reviewed cybersecurity ETFs to compile a preliminary list of stocks and then selected the ones with the highest upside potential based on Wall Street analysts’ average price targets. We have also mentioned the hedge fund sentiment around each stock, as of Q1 2025.

Note: All data was recorded on June 25, 2025.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

12 Best Cybersecurity Stocks to Buy Now

12. Fortinet, Inc. (NASDAQ:FTNT)

Upside Potential: 5.44%

Number of Hedge Fund Holders: 62

Fortinet, Inc. (NASDAQ:FTNT) is one of 12 best cybersecurity stocks to buy now. Fortinet, Inc. (NASDAQ:FTNT) has expanded its cloud security offering with the latest enhancements to its cloud-native application protection platform, FortiCNAPP, and has made the solution more widely available through the AWS Marketplace. The move aims to provide comprehensive code-to-cloud protection at a time when enterprises are increasingly relying on cloud infrastructure and demanding tighter integration between development and security operations.

Built on Lacework technology, FortiCNAPP offers visibility and protection from the earliest stages of application development through to deployment and runtime. The platform is designed to identify vulnerabilities in code, misconfigurations in cloud settings, compromised credentials, and active threats, while minimizing the volume of alerts that typically overwhelm security teams. By correlating findings across different stages of the application lifecycle, FortiCNAPP helps organizations prioritize and respond to the most serious risks.

Customers using FortiCNAPP are already seeing tangible results. LawnStarter, a company operating in a cloud-native environment, reported a 75 percent drop in compliance violations after deploying the platform. They credit the tool with improving access control, identifying configuration issues, and securing sensitive data within their AWS systems. With its inclusion in the AWS Marketplace, FortiCNAPP is now easier to deploy and integrates directly with services like Amazon Inspector, GuardDuty, and Security Hub. These updates reinforce Fortinet’s commitment to delivering integrated cloud security solutions that reduce complexity while enhancing protection across modern IT environments. The latest release positions Fortinet to meet growing demand for unified, scalable cloud security.

11. Extreme Networks, Inc. (NASDAQ:EXTR)

Upside Potential: 7.27%

Number of Hedge Fund Holders: 27

Extreme Networks, Inc. (NASDAQ:EXTR) is one of 12 best cybersecurity stocks to buy now. Rosenblatt Securities has raised its price target on Extreme Networks to $20 from the previous $18, while reiterating a Buy rating on the stock. The move reflects growing confidence in the company’s strategic direction and its execution across key networking segments. Extreme Networks, Inc. (NASDAQ:EXTR), a leading provider of cloud-driven networking solutions that includes embedded security features within its platforms, has been steadily gaining traction in both enterprise and service provider markets. Rosenblatt’s updated target suggests a belief that the company’s growth trajectory remains intact, supported by strong product demand and expanding customer adoption of its subscription-based offerings. Analysts at the firm noted that the ongoing transition to cloud-managed networking and the increasing need for secure, scalable connectivity are working in Extreme Networks’ favor.

Recent quarterly results showed resilience in a challenging macroeconomic environment, with the company demonstrating consistent revenue performance and improving operating margins. Extreme’s focus on high-margin software and cloud subscriptions appears to be gaining momentum, adding greater visibility to future earnings. Rosenblatt’s upward revision of the target price indicates expectations for continued outperformance relative to peers in the networking sector. With a refreshed product portfolio, the firm sees Extreme Networks, Inc. (NASDAQ:EXTR) well-positioned to capitalize on broader IT infrastructure modernization trends.