In this article, we will take a look at the 10 Best Performing Cybersecurity Stocks in 2024.
Data Breaches to Disruptions
The technology sector has expanded rapidly in recent years, creating an increasingly interconnected digital world. Cybersecurity, a relatively new field, has become critical as the volume of sensitive data stored online has surged. This growth has unfortunately provided more opportunities for cybercriminals to commit financial theft, steal confidential information, and disrupt vital infrastructure. In 2023 alone, data breaches affected over 349 million individuals, highlighting a troubling trend. The Consumer Sentinel Network received a surge in reports, with fraud making up over 2.6 million cases and identity theft surpassing one million. The scale of these threats is substantial; according to McKinsey, damages from cyberattacks could reach approximately $10.5 trillion annually by 2025—a 300% increase from 2015 levels.
A Microsoft Security survey reveals that small and mid-sized businesses (SMBs) face added challenges due to limited resources and expertise in implementing and managing advanced security solutions to detect, prevent, or mitigate cyberattacks. Fewer than one-third of respondents indicated that their SMBs handle security internally; the majority rely on consultants, managed service providers, or cyber insurance guidelines for choosing security tools.
AI Meets Cybercrime
As AI technology advances, data privacy and risk management concerns are escalating for individuals and businesses alike. Although regulators are exploring strategies to foster AI innovation while minimizing potential negative impacts on society, the United States still lacks comprehensive federal legislation addressing AI.
AI is transforming the cybersecurity landscape from both the threat and defense perspectives, creating a long-term growth path. “Cyber threats continue to evolve, and as digital transformation accelerates, so does the potential for cyberattacks,” noted Christopher Gilchrist, principal analyst at Forrester. Earlier this year, The World Economic Forum predicted that AI could push cyber incidents and data breaches to hit record levels in 2024, following a 72% year-over-year rise in breaches in the past year.
Nonetheless, the technology holds transformative potential for security. Palo Alto Networks remarked that 2024 “will be a phenomenal year in the utilization of AI in cybersecurity,” yet predicts even greater advances in the future. For investors, this growth represents an intriguing opportunity. According to Acumen research, the global market for AI-driven cybersecurity products was valued at around $15 billion in 2021, with projections to reach approximately $135 billion by 2030. AI’s ability to analyze vast data sets and detect patterns makes it especially effective for tasks like penetration testing, where systems are deliberately probed for vulnerabilities. By deploying AI tools to assess their own technology, organizations can identify weaknesses proactively—closing gaps before hackers have the chance to exploit them.
The constant evolution of external threats means that cybersecurity must continually adapt to stay ahead of emerging risks, with the top players racing to deliver innovative solutions to remain competitive. Now, let’s take a look at the best-performing cybersecurity stocks in 2024.
[Shutterstock: 380107090, scyther5]
Our Methodology
To compile our list of the best-performing cybersecurity stocks this year, we reviewed the holdings of various cybersecurity ETFs and sorted them by year-to-date performance, as of November 8, in ascending order. Additionally, we included hedge fund sentiment on each stock to provide further context and insight into each company’s outlook.
Why do we care about what hedge funds do? 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10. Cloudflare, Inc. (NYSE:NET)
Year-to-Date Performance as of November 8: 15.00%
Number of Hedge Fund Holders: 39
Cloudflare, Inc. (NYSE:NET) is a cloud-based cybersecurity and website management company that also offers routing and developer security services. Recently, the firm has made strides in the AI space by acquiring GPUs to enable customers to deploy AI models, including generative AI at the edge. With the current industry-wide GPU shortage, this early investment positions Cloudflare to potentially benefit from additional revenue streams.
Back in May of this year, Cloudflare, Inc. (NYSE:NET) expanded its Zero Trust offerings by acquiring BastionZero, a company specializing in secure infrastructure access. This acquisition enhances Cloudflare One’s capabilities, offering a VPN replacement that secures both applications and infrastructure resources.
On October 2, Citi maintained a Neutral rating for Cloudflare, Inc. (NYSE:NET) with a $90 price target, following the company’s 14th annual Birthday Week, where the company introduced several updates focused on cybersecurity and Secure Access Service Edge (SASE) developments. While Citi noted positive momentum in Cloudflare’s path toward $5 billion in revenue—citing improved go-to-market strategies and successful SASE integration—the firm also pointed out that the company’s current valuation reflects market optimism. Citi’s analysis also highlighted Cloudflare’s advancements in generative AI and its partnership with the tech giant Apple, particularly in expanding developer tools.
Baron Fifth Avenue Growth Fund stated the following regarding Cloudflare, Inc. (NYSE:NET) in its Q2 2024 investor letter:
“Cloudflare, Inc. (NYSE:NET) provides content delivery network services, cloud cybersecurity, denial-of-service mitigation, Domain Name Service, and ICANN-accredited domain registration services. Shares fell 14.4% during the quarter on remarks from the CEO about worsening macro conditions, citing the negative impact of geopolitical uncertainties on customer buying behavior. On the positive side, the company posted strong quarterly results with revenue growth of 30% year-over-year, showing evidence that the changes to the company’s go-to-market strategy were resonating with solid growth across its large customer cohorts (revenues from customers spending over $100,000 represented 67% of the total, up from 62% in the first quarter of 2023), double-digit improvement in sales productivity, and new pipeline attainment ahead of plan. Cloudflare reiterated revenue guidance for the year on resilience in cybersecurity spend. While we fine-tuned our model on the back of the company’s increased macro headwind commentary, pushing out revenue reacceleration estimates from the second quarter of 2024 to the first quarter of 2025, this is still ahead of guidance. We retain conviction in the long-term thesis: a strong founder-led business with a unique global network and significant pricing advantages powering a disruptive multi-product growth story with improving margins. We therefore remain shareholders.”
9. Varonis Systems Inc. (NASDAQ:VRNS)
Year-to-Date Performance as of November 8: 17.65%
Number of Hedge Fund Holders: 36
Varonis Systems Inc. (NASDAQ:VRNS), based in New York City with R&D operations in Herzliya, Israel, specializes in cybersecurity software. Its platform enables organizations to manage and secure unstructured data, leveraging User Behavior Analytics to detect and counter potential cyber threats.
On October 30, DA Davidson raised its price target for Varonis Systems Inc. (NASDAQ:VRNS) from $47 to $50, while maintaining a Neutral rating. This update followed Varonis’ earnings report, which exceeded market expectations, with Net New Annual Recurring Revenue (NNARR) surpassing estimates by about $5 million, while the Annual Recurring Revenue (ARR) grew at a steady 18% year-over-year, or 13% when excluding SaaS conversions. The company’s strong performance was driven by factors like customer conversions, new acquisitions, and growth in its Managed Detection and Response (MDDR) services, along with initial contributions from its GenAI and Copilot technologies.
Looking forward, Varonis Systems Inc. (NASDAQ:VRNS) has adjusted its Fiscal Year 2025 ARR growth projection to 17-18% year-over-year, slightly under buy-side expectations, which were around 19-20%.
8. General Dynamics Corporation (NYSE:GD)
Year-to-Date Performance as of November 8: 19.67%
Number of Hedge Fund Holders: 48
General Dynamics Corporation (NYSE:GD), based in Reston, Virginia, is a major American aerospace and defense firm. While typically not seen as a cybersecurity stock, its work with the U.S. government requires robust encryption and security measures. The company offers both hardware cybersecurity products, like encryptors, and software-based cybersecurity, including SaaS offerings.
Earlier in September, General Dynamics Information Technology, a division of General Dynamics Corporation (NYSE:GD), announced its acquisition of Iron EagleX, Inc., a prominent provider of AI/ML, cybersecurity, software development, and cloud services for Special Operations Forces and the intelligence community. This acquisition broadens GDIT’s advanced technology offerings, reinforcing its capacity to support defense and intelligence missions across all warfighting domains.
In Q3 2024, General Dynamics Corporation (NYSE:GD) posted strong results, achieving a 10.4% increase in revenue to $11.67 billion. This growth was largely fueled by substantial gains in the Aerospace and Marine Systems divisions, with Aerospace up by 22% and Marine Systems rising by 20%. Year-to-date, the company’s revenue reached $34.4 billion, with a net income of $2.63 billion. Its total backlog also grew to an impressive $92.6 billion, alongside a record estimated contract value of $137.6 billion.
7. Juniper Networks, Inc. (NYSE:JNPR)
Year-to-Date Performance as of November 8: 32.62%
Number of Hedge Fund Holders: 45
Juniper Networks, Inc. (NYSE:JNPR), based in California, is a global leader in networking technology, offering a range of products from routers and switches to network management tools, security solutions, and software-defined networking. Its cybersecurity offerings include firewalls, malware protection, anti-malware software, and data center service gateways.
The company reported strong third-quarter results, driven by increased demand, particularly in cloud and AI networking. Its adjusted earnings per share reached $0.48, surpassing analyst expectations of $0.45, while revenue hit $1.33 billion, beating the forecast of $1.27 billion—though this marked a 5% decline from the previous year. CEO Rami Rahim highlighted the growth, noting, “We experienced strong demand during the September quarter, with total product orders growing nearly 60% year-over-year.”
Additionally, Juniper Networks, Inc. (NYSE:JNPR) declared a quarterly cash dividend of $0.22 per share, payable on December 23.
6. CrowdStrike Holdings, Inc. (NASDAQ:CRWD)
Year-to-Date Performance as of November 8: 33.67%
Number of Hedge Fund Holders: 69
CrowdStrike Holdings, Inc. (NASDAQ:CRWD) specializes in cybersecurity solutions, offering products like identity management, threat intelligence, and detection. Its primary offering, the AI-native Falcon platform, achieved impressive growth at 80% year-over-year in the second quarter of fiscal 2025.
Earlier this July, a faulty software update by CrowdStrike Holdings, Inc. (NASDAQ:CRWD) triggered widespread technology outages across multiple industries, causing the company’s shares to plunge nearly 44% within two weeks, bottoming out in early August. Despite this setback, CrowdStrike’s stock has been on a steady recovery, though it hasn’t yet returned to its pre-incident highs. Investor sentiment around the company has turned optimistic, with 34 Wall Street analysts rating the stock a Buy and only six as Hold.
CrowdStrike’s strong fiscal second quarter of 2025, which ended shortly after the incident, fueled much of this optimism. The company reported a 32% year-over-year revenue increase and turned an operating profit compared to a loss in the same period the prior year. Net income per share rose to $0.19 from just $0.03 a year earlier. While Falcon’s performance continues to drive subscriptions, the company’s executives are targeting $10 billion in annual recurring revenue by the end of fiscal 2029, a goal that looks achievable as it focuses on margin improvements.
ClearBridge Growth Strategy stated the following regarding CrowdStrike Holdings, Inc. (NASDAQ:CRWD) in its Q3 2024 investor letter:
“Shares of CrowdStrike Holdings, Inc. (NASDAQ:CRWD), a global cybersecurity leader, came under pressure following a software content update in July that caused widespread disruptions across its client base. Importantly, the outage was not caused by a security breach and we are encouraged that the company was swift and transparent in its response and support for customers. While some level of recompense will be required, after ongoing dialogue with company management, we are optimistic that thoughtful remediation efforts, such as offering flexibility around new module uptakes, will position the company well for future growth. Shares have since rebounded on the back of better than feared channel feedback, which suggests CrowdStrike remains a best-in-class provider in the eyes of customers.”
5. Palo Alto Networks, Inc. (NYSE:PANW)
Year-to-Date Performance as of November 8: 35.47%
Number of Hedge Fund Holders: 66
Palo Alto Networks, Inc. (NASDAQ:PANW) is a leading American cybersecurity firm that provides security solutions for applications, users, and devices across the digital landscape. As one of the top providers of cybersecurity software, the company integrates AI-driven tools like its proprietary Precision AI to detect and respond to threats in an AI-centered environment.
Back in September, Palo Alto Networks, Inc. (NASDAQ:PANW) expanded its offerings by acquiring IBM’s QRadar SaaS assets, enabling QRadar customers to transition to Palo Alto’s Cortex XSIAM platform, which uses Precision AI to enhance security functions.
Oppenheimer reiterated its positive outlook on Palo Alto Networks, Inc. (NASDAQ:PANW) on October 22, raising its price target from $410 to $450 and maintaining an Outperform rating. The analysis pointed to Palo Alto’s steady performance and successful platformization strategy as key factors in its growth prospects. The company is projected to meet its October-quarter revenue guidance, set between $2.10 billion and $2.13 billion, representing a slight year-over-year decrease at the midpoint compared to notable growth in the prior quarter. The consensus revenue forecast for the quarter stands at $2.121 billion.
4. CyberArk Software Ltd. (NASDAQ:CYBR)
Year-to-Date Performance as of November 8: 36.31%
Number of Hedge Fund Holders: 55
CyberArk Software Ltd. (NASDAQ:CYBR) is a leading cybersecurity company focused on identity management, helping firms across industries like financial services, energy, retail, healthcare, and government secure their most sensitive assets by controlling access to privileged accounts.
In early October, CyberArk Software Ltd. (NASDAQ:CYBR) completed its acquisition of Venafi, broadening its total addressable market by $10 billion to approximately $60 billion. This acquisition strengthens CyberArk’s standing in identity security by integrating Venafi’s expertise in machine identity management. This synergy enhances CyberArk’s security frameworks, paving the way for comprehensive solutions that address the growing need to protect machine identities, including workloads, applications, and IoT devices.
On October 22, Oppenheimer raised its price target for CyberArk Software Ltd. (NASDAQ:CYBR), expecting it to exceed third-quarter revenue guidance of $230 million to $236 million. Oppenheimer also highlighted strong demand for CyberArk’s Workforce Access and Secrets Management solutions. Similarly, Scotiabank initiated coverage of CyberArk Software Ltd. (NASDAQ:CYBR) with a Sector Outperform rating and a price target of $340, while Baird maintained its Outperform rating with a target of $315. These ratings follow CyberArk’s strong second-quarter 2024 performance, which reported a 28% growth in revenue to $224.7 million and a 50% increase in Annual Recurring Revenue (ARR), totaling $868 million.
Next Century Growth Small Cap Strategy stated the following regarding CyberArk Software Ltd. (NASDAQ:CYBR) in its first quarter 2024 investor letter:
“CyberArk Software Ltd. (NASDAQ:CYBR) is a leading identity security platform which helps companies protect against cybersecurity attacks. CYBR specializes in privileged access management (PAM) and has a full suite of products for identity security. As cyber attack sophistication increases, companies of all sizes need to upgrade from legacy solutions such as SSO (single sign on) and MFA (multi-factor authentication), which is leading to a strong demand environment for CYBR’s solutions. Given this end market backdrop, the company is growing revenue >20% and is delivering solid margin expansion.”
3. Fortinet Inc. (NASDAQ:FTNT)
Year-to-Date Performance as of November 8: 59.29%
Number of Hedge Fund Holders: 42
Fortinet Inc. (NASDAQ:FTNT), a global leader in enterprise cybersecurity and networking, protects over 700,000 organizations worldwide, including enterprises, service providers, and government agencies. Its offerings span network firewalls, intrusion prevention, unified threat management, and advanced threat protection solutions.
Fortinet Inc. (NASDAQ:FTNT) is increasingly leveraging AI to improve its security capabilities. Its AI-driven assistant, FortiAI, now includes new tools to bolster threat detection and streamline incident investigation, including FortiAI for FortiNDR Cloud, designed to assist threat hunters by analyzing and correlating detections for better threat coverage insights, and FortiAI for Lacework FortiCNAPP, which equips security operations teams with enhanced alert clarity, offering guidance for remediation and corrective action through natural language queries. These integrations aim to optimize security analyst workflows and enable faster response to security incidents.
In its recent earnings report, Fortinet Inc. (NASDAQ:FTNT) surpassed analyst expectations for the third quarter. The company posted an adjusted EPS of $0.63, ahead of the $0.52 estimate, while quarterly revenue reached $1.51 billion, exceeding the consensus of $1.48 billion and marking a 13% year-over-year increase. Service revenue, the largest revenue component, rose 19.1% year-over-year to $1.03 billion, while product revenue saw a modest increase of 1.7% to $473.9 million. Fortinet Inc. (NASDAQ:FTNT) also raised its full-year 2024 guidance, now projecting revenue between $5.86 billion and $5.92 billion, aligning with analyst expectations.
Conestoga Capital Advisors stated the following regarding Fortinet, Inc. (NASDAQ:FTNT) in its Q3 2024 investor letter:
“Fortinet, Inc. (NASDAQ:FTNT) is the worldwide market share leader in network security firewalls (by units). During the quarter, FTNT reported a significant beat on billings and saw accelerating bookings growth, indicating the firewall product cycle may have turned positive. The company is also managing inventory well, and operating margins surprised to the upside in the reported quarter. FTNT maintains a healthy outlook for highly profitable growth.”
2. Broadcom Inc. (NASDAQ:AVGO)
Year-to-Date Performance as of November 8: 69.19%
Number of Hedge Fund Holders: 130
Broadcom Inc. (NASDAQ:AVGO) is a global technology powerhouse known for its expertise in semiconductor design, development, and supply, alongside its enterprise software and security solutions. The company’s cybersecurity portfolio includes a range of products, such as its Symantec Enterprise Cloud platform, as well as solutions for payment, mainframe, network, endpoint, and identity security.
In the third quarter, Broadcom Inc. (NASDAQ:AVGO) reported $13.1 billion in revenue, marking a 47% year-over-year increase. This growth was driven by strong AI revenue, VMware bookings, and solid non-AI semiconductor performance. Looking ahead to Q4 2024, Broadcom Inc. (NASDAQ:AVGO) expects its AI revenue to rise 10% sequentially, reaching $3.5 billion, which would bring the total for the year to $12 billion, primarily fueled by ethernet networking and custom AI accelerators for data centers.
On November 5, BofA reaffirmed its Buy rating on AVGO, citing the company’s leadership in AI computing and networking, along with its strong free cash flow. However, the bank lowered its fiscal 2025 earnings forecast due to seasonal challenges, particularly stemming from a product transition with Google’s Tensor Processing Unit (TPU) that is expected to affect revenue in the first half of the year. Still, Broadcom’s position is expected to be buoyed by new AI and networking contracts, along with further opportunities with Apple, potentially leading to adjusted earnings per share of $7.31 by 2026. As AI adoption continues to grow, Broadcom’s focus on high-performance AI networking solutions, especially in complement to NVIDIA’s Blackwell architecture, could potentially strengthen its future prospects.
1. Leidos Holdings, Inc. (NYSE:LDOS)
Year-to-Date Performance as of November 8: 83.72%
Number of Hedge Fund Holders: 38
Leidos Holdings, Inc. (NYSE:LDOS), headquartered in Reston, Virginia, is a U.S.-based leader in defense, aviation, IT, and biomedical research. The company provides comprehensive cybersecurity solutions spanning offensive, defensive, and cyber-physical systems, with expertise in areas such as zero trust and quantum cryptography. A major partner to the U.S. government, particularly the Department of Defense and Department of Homeland Security, Leidos Holdings, Inc. (NYSE:LDOS) also offers PACKIT™ (Proven, Analytic-Centric Kill Chain Implementation and Transformation) solutions, which help businesses strengthen their cybersecurity posture.
In Q3 2024, Leidos Holdings, Inc. (NYSE:LDOS) reported strong financial performance, achieving its sixth consecutive quarter of growth. Highlights include a record adjusted EBITDA margin of 14.2% and a 44% increase in adjusted diluted EPS, while quarterly revenue reached $4.19 billion, marking a 7% year-over-year increase. Additionally, the company raised its 2024 revenue guidance to between $16.35 billion and $16.45 billion, with adjusted EBITDA guidance in the high 12% range.
On November 5, JPMorgan raised its price target for Leidos Holdings, Inc. (NYSE:LDOS) to $205 from $185, maintaining an Overweight rating. This adjustment reflects Leidos’ strong performance in the Federal IT Services sector and its success in mitigating financial risks, especially within its Health & Civil division, where it excelled in the VA medical exams re-compete.
While we acknowledge the potential of LDOS, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than LDOS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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