We recently published a list of 10 High Growth Cybersecurity Stocks To Buy In this article, we are going to take a look at where Super Micro Computer, Inc. (NASDAQ:SMCI) stands against other high growth cybersecurity stocks to buy.
The cybersecurity industry is experiencing unprecedented growth, fueled by increasing cyber threats, the expansion of cloud computing, and the adoption of artificial intelligence (AI) in security measures. According to Cybersecurity Ventures, global cybercrime damages are projected to reach $10.5 trillion annually by 2025, up from $3 trillion in 2015, making cybersecurity one of the most critical industries in the digital age. As cyberattacks grow in frequency and sophistication, businesses, governments, and individuals are investing heavily in security solutions to mitigate risks.
Market Expansion and Demand Surge
The global cybersecurity market is expected to grow from $172.24 billion in 2023 to $562.72 billion by 2032, reflecting a compound annual growth rate (CAGR) of approximately 14.3%, according to a report by Fortune Business Insights. This rapid expansion is driven by increased spending across industries, particularly in sectors such as finance, healthcare, and government, where data protection is paramount.
The demand for cybersecurity solutions is further accelerated by the rise of ransomware attacks. Ransomware attacks have significantly increased in recent years, with 2024 marking a record high of 5,263 incidents—the highest volume observed since 2021 according to a new report from cybersecurity consulting firm, NCC Group. Major corporations and critical infrastructure have been targeted, with some ransomware payments reaching tens of millions of dollars. For instance, Colonial Pipeline paid $4.4 million in Bitcoin after a devastating cyberattack in 2021, underscoring the necessity for robust security defenses.
Cloud Security Spending
Cloud security spending is also seeing exponential growth. According to Gartner, global information security end-user spending is projected to total $212 billion in 2025, marking a 15.1% increase from $183.9 billion in 2024. The integration of artificial intelligence (AI) into cloud infrastructures is a significant factor contributing to increased cloud security spending. A recent survey in the 2025 Cloud & AI Index indicates that 89% of U.S. IT decision-makers plan to boost their cloud budgets in 2025, primarily to support AI workloads
Cybersecurity Talent Shortage
A severe talent shortage remains a challenge in the cybersecurity industry. According to the 2023 ISC2 Cybersecurity Workforce Study, the global cybersecurity workforce reached 5.5 million professionals, an 8.7% increase from the previous year. Despite this growth, the study identified a workforce gap of 4 million professionals needed to adequately defend organizations’ critical assets.
Our Methodology
To compile a list of the 10 High Growth Cybersecurity Stocks To Buy, we first utilized a stock screener to identify companies with a market capitalization exceeding $2 billion and a minimum 20% revenue growth over the past five years. From this selection, we then narrowed down the top 10 stocks based on the level of hedge fund interest. These stocks have been ranked in according to hedge fund sentiment as of Q4 2024.
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).
A team of technicians in a server room, testing and managing the newest server solutions.
Super Micro Computer, Inc. (NASDAQ:SMCI)
Number of Hedge Fund Holders: 45
Super Micro Computer Inc. (NASDAQ:SMCI) is a provider of accelerated compute platforms, offering application-optimized server and storage solutions for enterprise data centers, cloud computing, AI, 5G, and edge computing. Its diverse product portfolio includes Rackmount Servers, GPU Servers, Twin Servers, and Storage Servers, catering to a wide range of computing needs.
Following the resignation of its auditor, Ernst & Young, in late 2024 due to governance concerns, the company swiftly appointed BDO and initiated an internal review, which found no evidence of fraud or misconduct. With strong partnerships, including continued collaboration with NVIDIA, and a commitment to enhancing corporate governance, Super Micro Computer, Inc. (NASDAQ:SMCI) is positioning itself to capitalize on the surging AI infrastructure demand.
Super Micro Computer, Inc. (NASDAQ:SMCI) continues its strong growth trajectory, reporting preliminary Q2 FY25 revenue of $5.6-$5.7 billion, marking a 54% YoY increase. The company’s non-GAAP EPS is expected to land between $0.58-$0.60, reflecting 5% YoY growth, while GAAP EPS remains flat at $0.50-$0.52. CEO Charles Liang anticipates FY25 revenue in the range of $23.5-$25 billion, setting the stage for an ambitious $40 billion target in FY26.
Overall, SMCI ranks 8th on our list of high growth cybersecurity stocks to buy. While we acknowledge the potential for SMCI as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than SMCI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.