Cybersecurity isn’t just growing – it’s exploding. Global cybersecurity spending is projected to soar from $265 billion today to nearly $400 billion by 2028 according to IDC Worldwide. And this is one area of IT spending that cannot be cut. Morgan Stanley research found ransomware attacks hit 72% of large firms last year, and the average data breach now costs nearly $5 million.
For investors though, cybersecurity isn’t a threat but a multi-decade opportunity. I’ve already booked a 109% return on my favorite and am still buying more.
This is why cybersecurity is my #1 growth theme. It’s not just about the upside—these companies keep growing in any market. Cybersecurity is one of the few areas where companies never cut spending, even during recessions. The threat is too great, and the cost of failure too high.
But not all cybersecurity stocks are created equal. To separate the great from the just-OK, you have to dig deeper into segment growth and which companies dominate the different areas of the industry. That’s because while overall cybersecurity demand is forecast to grow at a 12% annualized rate, the average hides a giant gap at the segment level.
- Cloud Security – Protects cloud-based apps and data, forecast to grow 15% to 18%
- SASE/Service Edge – Combines networking and security for remote work, forecast to grow 13% to 16%
- Endpoint Protection – Secures devices like laptops and phones, forecast to grow 10% to 14%
- Identity Access – Controls user authentication and permissions, forecast to grow 9% to 12%
- SIEM – Analyzes and detects threats across systems, forecast to grow 8% to 11%
- Firewalls/Hardware – Legacy security still used in hybrid environments, forecast to grow 3% to 5%
The saying goes, “A rising tide lifts all boats,” and that’s true of the cybersecurity theme, lifting all the stocks in the group but knowing the difference in segment growth, combined with research into which companies compete and which dominate the various segments can help you pick stocks that produce outsized returns…and here are my top five.
Palo Alto Networks (PANW) is the most complete platform in cybersecurity, with offerings in nearly every segment—cloud security, endpoint, SASE, SIEM, and traditional firewalls. Its approach consolidates tools into full-suite solutions like Prisma and Cortex, making it the default provider for enterprise customers. Its next-gen security business is growing over 30% annually, while its AI-powered Cortex XSIAM platform is growing over 200%.
Palo Alto posted revenue of $8.8 billion and $984 million in operating income last year, for an 11% operating margin, the second highest among peers. Like every stock in this runaway theme, shares trade expensively at 70X-plus on a price-to-earnings basis but adjusting for a 20% growth rate in earnings makes this a great all-around play.
Fortinet (FTNT) dominates in network security and firewalls, with over 600,000 devices installed worldwide. Many of those devices are nearing the end of their lifecycle, setting up a $400–450 million refresh cycle. While its firewall-heavy product base means slower revenue growth, Fortinet boasts a jaw-dropping 31% operating margin – turning nearly one-third of revenue into profit.
That profitability gives Fortinet cash to expand into higher-growth segments like SASE and SD-WAN, where over 70% of its customers are already partially onboard. It’s also one of the more affordable names in the space, making it a solid value play in an expensive sector.
Okta Inc (OKTA) is one of only two pure-play leaders in Identity and Access Management, helping companies manage who can access what across networks, cloud platforms, and apps. What makes Okta stand out is its vendor-agnostic platform; integrating across Microsoft, Google, and Amazon seamlessly. That flexibility is crucial in today’s hybrid, multi-cloud world.
Growth is slower here, analysts expect under 10% annually, but Okta’s lack of major competition in its niche gives it a long runway. The real play is in a potential acquisition. Its focused dominance makes it a prime target for a larger cybersecurity firm looking to complete a portfolio.
Zscaler (ZS) is one of the fastest-growing companies in cybersecurity, with shares up over 74% this year alone. It pioneered the zero-trust, cloud-first security model, abandoning the legacy hardware approach and changing the industry.
Zscaler’s Zero Trust Exchange now inspects over half a trillion transactions per day, giving it unmatched visibility and threat detection capabilities. It dominates in SASE (Secure Access Service Edge), with a 21% global market share and a whopping 34% in the Security Service Edge subsegment.
The company’s $2.9 billion cloud ARR is growing over 22% annually, and analysts expect the SASE market to hit $30 billion by 2030. While it’s one of the more expensive stocks in the group, Zscaler’s leadership in fast-growing segments makes it a compelling pick.
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CrowdStrike Holdings (CRWD) may become the most valuable cybersecurity company of them all. It’s already a leader in endpoint security and SIEM, but its real edge is in AI-driven cybersecurity.
The company’s agentic assistant, Charlotte AI, works like a teammate; investigating threats, automating responses, and making decisions in natural language. This gives CrowdStrike a massive lead in next-gen AI integration, far beyond competitors trying to bolt AI onto legacy tools. Its Falcon platform is the most adopted XDR solution, with over 60% of customers using five or more modules.
CrowdStrike processes over a trillion security events per day, constantly training Charlotte and expanding its threat intelligence graph. This AI-first architecture gives it a structural advantage that’s nearly impossible to replicate. At a 120-times price-to-earnings ratio, the stock is no longer cheap after its 109% run since I started buying last year, but you can’t fight this kind of growth.
Disclosure: This Stock Doubled My Money – and I’m Buying More is written by Joseph Hogue, CFA who is a former equity analyst and economist. Born and raised in Iowa, after serving in the Marine Corps, Joseph worked in corporate finance and real estate before starting a career in investment analysis. He has appeared on Bloomberg and CNBC and led a team of equity analysts for a venture capital research firm. He holds a master’s degree in business and the Chartered Financial Analyst (CFA) designation.
Positions in stocks mentioned: CRWD, PANW, ZS
