In this article, we will take a look at the 11 Best Cybersecurity Stocks to Buy According to Wall Street Analysts.
The widespread growth of internet usage has seamlessly integrated connectivity into the daily lives of individuals and businesses. This expansion has also created greater opportunities for cybercriminals to engage in financial theft, compromise sensitive information, and disrupt critical infrastructure. Despite progress in reducing response times to cyber risks, it still takes organizations an average of 73 days to contain an incident. As organizations navigate an increasingly complex cyber threat landscape, staying ahead of emerging cybersecurity trends has become crucial. Amid the rise in both the volume and sophistication of cyberattacks, global spending on cybersecurity products and services reached $200 billion in 2024, a sharp increase from $140 billion in 2020, according to McKinsey. Additionally, the cybersecurity market is projected to grow at an annual rate of 12.4% between 2024 and 2027, exceeding historical growth levels as organizations intensify efforts to counter evolving threats.
The rise of artificial intelligence also presents a dual opportunity for cybersecurity prospects: securing AI systems and leveraging AI to bolster security capabilities. These technologies enhance threat detection, automate responses, and improve predictive analytics, allowing for more proactive and efficient defenses against increasingly sophisticated attacks. According to McKinsey, AI is broadening the scope of what is already a $2 trillion market opportunity for cybersecurity providers. The firm further states that securing AI has emerged as a distinct cybersecurity market segment, projected to grow from $122 million today to $255 million by 2027. Additionally, as more organizations shift workloads from public cloud environments to private clouds, they face new expenses, further increasing the capturable value for cybersecurity vendors.
On the other hand, as AI technology advances, concerns around data privacy and risk management are escalating for individuals and businesses alike. The World Economic Forum projected earlier this year that AI advancements could drive cyber incidents and data breaches to unprecedented levels in 2024, following a staggering 72% increase in breaches over the past year.
Cybersecurity Regulations and Policies
President-elect Donald Trump’s return, coupled with his commitment to a more inward-focused foreign policy, is expected to bring new cyber threats, reduced regulations across most industrial sectors, and the possibility of business-friendly federal privacy legislation. However, the overall regulatory landscape will likely shift toward less emphasis on compliance and greater focus on safeguarding critical infrastructure and technology firms, according to Michael Bahar, co-lead of global cybersecurity and data privacy at Eversheds Sutherland.
“We are going to see — at the federal level — a deprioritization of cybersecurity regulations and cybersecurity enforcement. One really important exception is where cybersecurity intersects with trade policy and national security and technology. That’s actually where you’re going to see an increase of enforcement and at least a continuation of the regulatory environment.”
Experts anticipate that cyber threats could evolve in response to shifts in foreign policy under the new administration. China, in particular, has emerged as a significant concern due to its cyber activities in the Asia-Pacific region, its opposition to U.S. support for Taiwanese democracy, and its defiance of international opposition to its expansive claims in the South China Sea.
Our Methodology
To make our list of top cybersecurity stocks to buy according to Wall Street analysts, we reviewed the holdings of the Global X Cybersecurity ETF and selected stocks based on their upside potential, as of December 10. These stocks are ranked according to their average upside potential, from lowest to highest, based on price targets. Additionally, we have included the number of hedge funds with stakes in these stocks, using Insider Monkey’s hedge fund data for the third quarter.
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).
11. Gen Digital Inc. (NASDAQ:GEN)
Average Analyst Upside: 8.03%
Number of Hedge Fund Holders: 27
Gen Digital Inc. (NASDAQ:GEN), a global leader in cybersecurity, specializes in safeguarding individuals and businesses from online threats. The company operates prominent brands such as Norton, Avast, and LifeLock, among others, offering a range of cybersecurity services.
On December 10, Gen Digital Inc. (NASDAQ:GEN) announced a definitive agreement to acquire MoneyLion Inc., a financial technology firm. The acquisition brings with it MoneyLion’s ecosystem of advanced digital consumer finance tools, including personal finance management and an AI-driven recommendation platform, enhancing Gen Digital’s service portfolio.
Moreover, Gen Digital Inc. (NASDAQ:GEN) demonstrated strong financial performance in Q2 fiscal 2025. Earnings per share grew by 16%, while total revenue increased by 3% to $974 million. Bookings also rose 5%, totaling $964 million. Additionally, the company expanded its customer base by adding 400,000 direct paying users, bringing the total to 39.7 million. Its AI-powered Genie anti-scam product has also achieved over 1.6 million downloads. As a result, the cybersecurity player raised its full-year revenue guidance to $3.905–$3.930 billion and its EPS guidance to $2.18–$2.23.
10. CyberArk Software Ltd. (NASDAQ:CYBR)
Average Analyst Upside: 8.70%
Number of Hedge Fund Holders: 55
CyberArk Software Ltd. (NASDAQ:CYBR) is a prominent cybersecurity company specializing in identity management. It helps organizations across sectors like financial services, energy, retail, healthcare, and government protect sensitive assets by securing access to privileged accounts.
Back in October, CyberArk Software Ltd. (NASDAQ:CYBR) completed its acquisition of Venafi, expanding its total addressable market by $10 billion to approximately $60 billion. This acquisition reinforces CyberArk’s leadership in identity security by integrating Venafi’s expertise in machine identity management. The collaboration enhances CyberArk’s security offerings, enabling comprehensive solutions to protect machine identities, including workloads, applications, and IoT devices.
On December 9, Jefferies raised its price target for CyberArk Software Ltd. (NASDAQ:CYBR) to $400 from $340, citing optimism about the 2025 outlook for annual recurring revenue (ARR) growth and the strategic impact of the Venafi acquisition. CyberArk’s ARR expectations for 2025, including Venafi, suggest a 20% year-over-year growth, aligning with the company’s projections. Jefferies expects the company to initially guide ARR growth in the low 20% range for 2025, with gradual acceleration throughout the year.
In Q3 2024, CyberArk Software Ltd. (NASDAQ:CYBR) delivered strong financial results, achieving record revenue of $240.1 million, a 26% increase year-over-year. For Q4, the company anticipates revenue between $297 million and $303 million, exceeding the consensus estimate of $259.7 million. In addition, non-GAAP operating income is projected between $43.5 million and $48.5 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.”
9. Zscaler, Inc. (NASDAQ:ZS)
Average Analyst Upside: 8.88%
Number of Hedge Fund Holders: 52
Zscaler, Inc. (NASDAQ:ZS), based in San Jose, California, is a prominent cybersecurity company providing solutions to secure private networks, manage platform access, and ensure regulatory compliance.
Zscaler, Inc. (NASDAQ:ZS) recently expanded its partnership with Cognizant to deliver an advanced, AI-powered zero-trust cloud security platform tailored to address evolving cyber threats. The collaboration offers integrated solutions to simplify security, enhance protection, and reduce costs.
KeyBanc Capital Markets recently raised its price target for Zscaler, Inc. (NASDAQ:ZS) to $250 from $245 while maintaining an Overweight rating. This adjustment follows the company’s robust Q1 performance, marked by a slight billings beat and upward revision of future earnings. Zscaler achieved a 34% year-over-year revenue growth and maintained impressive gross profit margins of 78%, showcasing operational efficiency. Despite concerns about the CFO’s announced retirement ahead of a significant expected revenue ramp in the year’s second half, KeyBanc remains confident. Analysts anticipate a more measured growth trajectory in the latter half, building on Zscaler’s initial success in the first quarter.
8. Varonis Systems, Inc. (NASDAQ:VRNS)
Average Analyst Upside: 11.81%
Number of Hedge Fund Holders: 42
Varonis Systems Inc. (NASDAQ:VRNS), headquartered in New York City with R&D operations in Herzliya, Israel, is a cybersecurity software company specializing in managing and securing unstructured data. Its platform utilizes User Behavior Analytics to detect and mitigate potential cyber threats.
Citi maintained its Neutral rating for Varonis Systems Inc. (NASDAQ:VRNS) but raised its price target to $57 from $50, reflecting cautious optimism following the company’s solid Q3 performance. The analyst highlighted a 17.7% year-over-year growth in ARR, indicating modest acceleration. While some areas underperformed, the new target acknowledges the company’s improving potential.
Varonis Systems Inc. (NASDAQ:VRNS) reported a revenue beat in its latest earnings, despite underperformance in the Federal sector, which missed projections by several million dollars. ARR demonstrated a slight quarter-over-quarter growth of 30 basis points, while the $52 million SaaS NNARR (Net New Annual Recurring Revenue) showed stronger quarter-over-quarter improvement. These results position the company competitively in the data security, Data Security Posture Management, and data resiliency markets. The company also highlighted the monetization of GenAI as a promising narrative, further supporting its valuation in the face of a decent stock performance.
7. Tenable Holdings, Inc. (NASDAQ:TENB)
Average Analyst Upside: 15.12%
Number of Hedge Fund Holders: 29
Tenable Holdings, Inc. (NASDAQ:TENB) provides cyber exposure and vulnerability management solutions, helping organizations secure IT, cloud, and operational environments globally. Its key offerings include Tenable Vulnerability Management, Tenable Cloud Security, and the widely used Nessus platform.
Earlier this September, Tenable Holdings, Inc. (NASDAQ:TENB) launched Tenable Enclave Security, designed specifically for highly secure, classified, or air-gapped environments. Integrated with Tenable Security Center, the solution delivers risk assessments and contextual insights, enabling proactive identification and mitigation of exposures. That same month, the company introduced AI Aware, an advanced feature in Tenable Vulnerability Management that detects vulnerabilities in AI applications, libraries, and plugins.
For Q3, 2024, Tenable Holdings, Inc. (NASDAQ:TENB) reported results surpassing analyst expectations. Revenue increased 13% year-over-year, driven by the success of Tenable One, a platform powered by Cloud Security and Identity services. Strong growth was also observed in the Public Sector and mid-market segments. While the company faced market challenges, including longer sales cycles and heightened deal scrutiny, it showcased resilience with an impressive pipeline build and raised guidance for future performance.
6. General Dynamics Corporation (NYSE:GD)
Average Analyst Upside: 21.45%
Number of Hedge Fund Holders: 48
General Dynamics Corporation (NYSE:GD), headquartered in Reston, Virginia, is a leading American aerospace and defense company, specializing in advanced encryption and cybersecurity solutions critical for its work with the U.S. government. The company provides both hardware-based cybersecurity tools, such as encryptors, and software-focused solutions, including SaaS offerings.
Earlier this year, the company’s business unit, General Dynamics Information Technology (GDIT), was awarded a $185 million task order to deliver cybersecurity services for the U.S. Air Force Civil Engineer Center. Issued by the 772nd Enterprise Sourcing Squadron at Tyndall Air Force Base, the contract involves researching and developing innovative methods to mitigate cybersecurity threats targeting the Air Force’s industrial control systems. These systems encompass building automation, life safety, utility monitoring, and airport control.
In Q3 2024, General Dynamics Corporation (NYSE:GD) reported robust financial performance, with revenue rising 10.4% year-over-year to $11.67 billion. This growth was driven by exceptional gains in the Aerospace (up 22%) and Marine Systems (up 20%) divisions. Year-to-date, the company has generated $34.4 billion in revenue and $2.63 billion in net income. Its total backlog increased to $92.6 billion, with an all-time high estimated contract value of $137.6 billion.
5. Okta, Inc. (NASDAQ:OKTA)
Average Analyst Upside: 21.61%
Number of Hedge Fund Holders: 47
Okta Inc. (NASDAQ:OKTA), a leading identity and access management (IAM) company, offers cloud software designed to help organizations manage and secure user authentication across applications. Its solutions also enable developers to integrate identity controls into apps, websites, web services, and devices. One of its flagship offerings is Identity Threat Protection, powered by Okta AI.
For the third fiscal quarter, Okta Inc. (NASDAQ:OKTA) reported earnings per share of $0.67, surpassing market expectations by $0.09. The company generated $665 million in revenue, marking an increase of nearly 14% year-over-year and exceeding analyst forecasts by over $15.3 million.
In response to these results, Piper Sandler maintained its Neutral rating on Okta Inc. (NASDAQ:OKTA), a $14.5 billion market cap identity management company known for its impressive 75.8% gross margins. The firm raised its price target to $90 from $85 and forecasted about 7% revenue growth for fiscal year 2026. The analyst characterized this forecast as conservative, reflecting ongoing uncertainty regarding the timing of a potential growth inflection for Okta.
Meridian Growth Fund stated the following regarding Okta, Inc. (NASDAQ:OKTA) in its Q3 2024 investor letter:
“Okta, Inc. (NASDAQ:OKTA) is the largest independent identity software company, serving a large and diverse clientele, including enterprises, universities, and government agencies. Its solutions provide advanced security authentication, and integration with over 7,000 software vendors enhances its competitive advantage. Despite beating earnings expectations and raising guidance, the stock underperformed due to concerns about a slightly lower-than-expected forward growth metric, which led to worries about fiscal year 2026 growth prospects. Historically, management has been conservative in its guidance and has consistently over-delivered, and we believe the market overreacted as fundamentals remain strong. As a result, we added to our position during the quarter.”
4. SentinelOne, Inc. (NYSE:S)
Average Analyst Upside: 24.48%
Number of Hedge Fund Holders: 37
SentinelOne, Inc. (NYSE:S), a prominent cybersecurity provider, is recognized as a leader in Gartner’s Magic Quadrant for Endpoint Detection and Response (EDR) and a strong performer in MITRE ATT&CK evaluations. The company offers a range of solutions, including its Singularity Platform, endpoint protection, and attack surface management tools.
TD Cowen maintained its Buy rating on SentinelOne, Inc. (NYSE:S) with a price target of $35, highlighting the company’s potential to disrupt the $7 billion legacy antivirus market and achieve strong revenue growth by fiscal year 2026. The firm’s optimism stems from rising win rates, positive momentum with new customers, and increased spending from existing clients—factors described as an “exciting cocktail” for SentinelOne’s growth. TD Cowen views the company’s FY26 revenue outlook and guidance for the first quarter of FY26 as critical catalysts for further growth.
Despite this optimism, SentinelOne’s stock recently faced pressure after its third-quarter revenue only narrowly exceeded Wall Street expectations, while guidance came in slightly higher than anticipated. The company reported a 29% year-over-year increase in annualized recurring revenue (ARR) from subscription services, reaching $859.7 million, slightly above the estimated $857 million. For the current quarter ending in January, SentinelOne, Inc. (NYSE:S) projected revenue of $222 million, marginally surpassing analyst estimates of $220.6 million.
3. Leidos Holdings, Inc. (NYSE:LDOS)
Average Analyst Upside: 25.51%
Number of Hedge Fund Holders: 38
Leidos Holdings, Inc. (NYSE:LDOS), headquartered in Reston, Virginia, is a prominent U.S. leader in defense, aviation, IT, and biomedical research. The company offers comprehensive cybersecurity solutions, including offensive and defensive systems, cyber-physical protections, zero trust frameworks, and advancements in quantum cryptography.
On December 12, UBS initiated coverage on Leidos Holdings, Inc. (NYSE:LDOS) with a Neutral rating and a price target of $182. UBS emphasized the company’s solid performance, noting a consistent book-to-bill ratio of 1.1 to 1.2 over the past three years, reflecting stable growth. The research also pointed to new claims from the Veterans Benefits Administration as a driver of sustainable volume and favorable margins, following a strong showing in 2024. That said, while UBS projected Leidos’ 2025 earnings per share to exceed consensus estimates by 6%, it also acknowledged the company’s guidance for slower growth in 2025.
Leidos Holdings, Inc. (NYSE:LDOS) delivered its sixth consecutive quarter of growth in Q3 2024, achieving a record adjusted EBITDA margin of 14.2%, a 44% rise in adjusted diluted EPS, and a 7% revenue increase year-over-year to $4.19 billion. This performance led the company to raise its 2024 revenue guidance to $16.35 billion–$16.45 billion. Additionally, Leidos Holdings, Inc. (NYSE:LDOS) increased its dividend to $0.40 per share and secured $8.1 billion in net bookings, expanding its total backlog to $40.6 billion.
2. Radware Ltd. (NASDAQ:RDWR)
Average Analyst Upside: 26.74%
Number of Hedge Fund Holders: 17
Radware Ltd. (NASDAQ:RDWR), an Israeli systems software company, specializes in cybersecurity and application delivery solutions for cloud, on-premise, and software-defined data centers across the globe.
On November 19, Radware Ltd. (NASDAQ:RDWR) introduced AI SOC Xpert, a cloud security service leveraging artificial intelligence to reduce incident resolution times for DDoS and application security threats by up to 95%. The service automates key security operations, including attack detection, root cause analysis, and remediation, optimizing SOC efficiency.
Radware Ltd. (NASDAQ:RDWR) delivered strong results in Q3 2024, with revenue rising 13% year-over-year to $69.5 million. Non-GAAP earnings per share surged to $0.23, compared to $0.07 in the same quarter last year. This growth was largely attributed to the robust performance of its cloud security business, as cloud Annual Recurring Revenue climbed 15% to $71.6 million.
Looking ahead, the cybersecurity company forecasts Q4 2024 revenue between $71 million and $72 million and expects non-GAAP diluted EPS in the range of $0.23 to $0.24. Radware Ltd. (NASDAQ:RDWR) also plans to modestly increase operating expenses, primarily focusing on sales and marketing initiatives to support its growth trajectory.
1. Telos Corporation (NASDAQ:TLS)
Average Analyst Upside: 51.42%
Number of Hedge Fund Holders: 12
Telos Corporation (NASDAQ:TLS) specializes in advanced technology solutions for security and compliance. Its offerings include identity management, enterprise security, secure mobility, cyber risk management, and compliance services. The company also provides a web-based platform for managing organizational message traffic.
In its recent earnings call, Telos Corporation (NASDAQ:TLS) reported Q3 revenue of $23.8 million, with the Security Solutions segment, primarily driven by the TSA PreCheck program, contributing 77% of total revenue. Despite incurring a notable charge during the quarter, the company improved its adjusted gross margin and posted a smaller-than-expected adjusted EBITDA loss. For Q4, Telos Corporation (NASDAQ:TLS) projects revenue between $24.5 million and $26.5 million, and the company remains optimistic about achieving substantial year-over-year revenue growth by 2025, supported by a strong business pipeline valued at approximately $4.1 billion.
Following these results, BMO Capital Markets raised its price target for Telos Corporation (NASDAQ:TLS) to $4.50 from $3.00, while maintaining a Market Perform rating. The firm highlighted positive developments in Telos’s Transportation Security Administration (TSA) operations, which are expected to expand further. However, analysts emphasized that sustained growth into 2025 will depend on Telos’s ability to effectively execute its large contract awards.
While we acknowledge the potential of TLS, 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 TLS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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