10 Best Cybersecurity Stocks To Buy According To Hedge Funds

6. Okta, Inc. (NASDAQ:OKTA)

Number of Hedge Fund Investors  in Q1 2024: 54

Okta, Inc. (NASDAQ:OKTA) is a specialty cybersecurity company that enables businesses and organizations to manage their networks by allowing access based on identity verification. Since identity verification is a key aspect of the cybersecurity industry, and one that businesses and especially national security entities have to continue to rely on no matter how bad the market is, Okta, Inc. (NASDAQ:OKTA) benefits from a stable customer base. For software firms, which are valued on recurring revenue and retention rate, this aspect of its market lends Okta, Inc. (NASDAQ:OKTA)’s share stability during a tough economy. At the same time, should the firm be out competed by rivals, then the shares will fall as well. Additionally, the key to the firm’s hypothesis is to grow its business with existing customers, as it signals to investors management’s ability to innovate.

Okta, Inc. (NASDAQ:OKTA)’s management shared key details for its business deals during the Q1 2025 earnings call. These are key for its revenue growth, which is another important valuation metric for software stocks:

“We were encouraged by Q1’s strong top-line metrics and pipeline growth. Public sector was a particular area of strength, led by our largest ever public sector deal.

In fact, five of our top six deals in Q1 were with public sector organizations. And despite the strong quarter for public sector deals, which are typically one year deals, weighted average contract term length for contracts signed in the quarter increased year-over-year. We added 150 net new customers in the quarter. This primarily reflects the ongoing business trends of the current macro environment, resulting in increased weighting of upsell versus new business and continued strength with large enterprise customers. Once again, our fastest growing cohort was large customers with $1 million plus ACV.”