10 Best Cybersecurity Stocks to Buy: Picked By Hedge Funds

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Previously we covered the 10 Best Cybersecurity Stocks to Buy According to Analysts. In this article we are going to take a look at hedge funds’ top cybersecurity stock picks.  Hedge funds are highly sensitive to valuation multiples. When high-growth cloud security stocks reach “nosebleed” price-to-sales multiples, hedge funds often take profits and rotate into diversified giants or enterprise consolidators. That’s why we are expecting to see a different picture in this analysis.

Artificial intelligence is creating a bigger market for cybersecurity companies, but not for the reason investors might expect. The technology is helping defenders find weaknesses faster, while giving attackers new ways to exploit them. That leaves businesses facing a growing security challenge just as they begin integrating AI into more of their operations.

The problem has become increasingly visible. On October 23, Reuters reported that AI had contributed to a doubling of the number of digital vulnerabilities discovered year over year, according to research from cybersecurity firm VulnCheck. Recent flaws in widely used software also triggered disruptions, with some website operators temporarily taking their services offline rather than risk exploitation. Security experts warned that AI could shorten the time between discovering a vulnerability and developing a way to exploit it. The extent to which this will translate into successful attacks remains uncertain, but companies have less room to ignore weaknesses in their systems.

Businesses appear to be taking the risk seriously. PwC’s October 2026 Global Digital Trust Insights survey found that 84% of security and finance leaders expect their cybersecurity budgets to increase over the next 12 months, up from 78% a year earlier. AI is also becoming a direct spending priority: 58% of security leaders ranked it among their top cybersecurity budget priorities. Yet half of the security leaders surveyed said attacks targeting AI systems were among the threats their organizations were least prepared to handle. That gap between investment and preparedness gives cybersecurity providers a practical opportunity to address a problem businesses are still struggling to solve.

The opportunity extends beyond protecting companies from AI-powered attacks. As businesses deploy AI agents and connect them to internal systems, they need stronger controls over identities, permissions and access to sensitive data. They also need tools that can detect suspicious activity and respond quickly, ideally without overwhelming already stretched security teams. Cybersecurity companies that can automate more of this work may be well positioned to benefit.

Our Methodology

For this list, we looked at cybersecurity stocks that saw an increase in hedge fund ownership in Q2 2026 compared with the previous quarter, based on Insider Monkey’s database. We then ranked the stocks by the number of hedge funds holding them at the end of Q2, from highest to lowest. When two stocks had the same number of hedge fund holders, we ranked the company with increased hedge fund interest in Q2 higher.

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. Insider Monkey’s quarterly newsletter strategy selects 14 small-cap and large-cap stocks every quarter and has returned 599.2% since May 2014, beating its benchmark by 372 percentage points (see more details here).

These strategy returns are measured through June 2, 2026.

10. Qualys, Inc. (NASDAQ:QLYS)

Number of Hedge funds: 34

Market cap: $7.88 billion

Qualys is a profitable cybersecurity business, but analysts are not convinced the stock has much room left at its current price. Recent ratings still lean toward Hold, even after some analysts raised their price targets in October. The bullish case centers on its vulnerability management and exposure management tools. As companies add AI applications, they also add systems, data paths and permissions that need to be monitored. Qualys wants to bring that work together rather than make customers manage every risk separately.

Its Q2 revenue rose 11% year over year to $182.2 million, and the company raised its full-year revenue guidance. It also generated $52.4 million in GAAP net income, so this is not a business burning cash to chase the AI story. The concern is growth. Investors want stronger acceleration before assigning the stock a higher multiple. Qualys has the profits and products, but it still needs to show that demand for AI security can translate into faster growth.

The number of hedge funds holding QLYS in Insider Monkey’s database increased from 33 in Q1 to 34 in Q2 2026. The combined value of their stakes rose from $434.8 million to $719.3 million.

9. Check Point Software Technologies Ltd. (NASDAQ:CHKP)

Number of Hedge funds: 37

Market cap: $16.32 billion

Check Point is a different kind of cybersecurity bet. It is an established, cash-generative business, but its overall growth has been slow. In Q2 2026, revenue rose just 1% year over year to $674 million. The encouraging part was security subscription revenue, which increased 12%, while non-GAAP earnings per share grew 8%.

That is where the analyst debate sits. Recent ratings have been mixed, with many analysts maintaining Hold recommendations even as some raised their price targets. Those who are more positive see scope for subscriptions and newer security products to become a bigger part of the business. Others want to see stronger overall revenue growth before becoming more enthusiastic.

Check Point also has an opportunity to help businesses secure increasingly complex networks and AI-related workloads. Still, that opportunity has yet to produce the kind of growth reported by some larger platform competitors. The stock may appeal to investors who value profitability and recurring revenue, but a stronger re-rating will be difficult to justify until growth improves.

The number of hedge funds holding the stock in Insider Monkey’s database increased from 33 in Q1 to 37 in Q2 2026. Their combined stake value, however, soared  from $353.7 million to $813.9 million.

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