We recently published a list of 13 Best Cybersecurity Stocks to Buy According to Billionaires. In this article, we are going to take a look at where Zscaler, Inc. (NASDAQ:ZS) stands against other best cybersecurity stocks to buy according to billionaires.
The cybersecurity market is poised for significant growth over the coming years, driven by an increasingly complex threat landscape and rapid digital transformation across industries. According to a recent study by Grand View Research Inc., the global cybersecurity market is projected to grow at a compound annual growth rate (CAGR) of 12.9% from 2025 to 2030. This robust growth is fueled by escalating cyber threats and advanced malware attacks across multiple verticals, including banking, retail, information technology, defense, and manufacturing.
In 2024 and into 2025, investments in cyber security are also surging. The Reuters report has highlighted that $4 billion was raised in 2024 by Israeli cybersecurity firms. This underscores that cloud security—integral to protecting sensitive data and digital assets—is becoming a primary focus for enterprises worldwide.
Cybersecurity Talent Shortage
A critical challenge facing the industry is the widening talent gap. As cyber threats become more sophisticated, the demand for qualified professionals has skyrocketed, with estimates from cybersecurity ventures predicting that over 3.5 million cybersecurity positions could remain unfilled by 2025. In response, recent commentary from the U.S. highlights calls for broadening hiring practices—such as removing rigid college degree requirements—to tap into a larger pool of skilled talent. This push for more inclusive hiring is seen as essential for meeting the nearly 500,000 open cybersecurity jobs currently reported in the U.S. alone.
Regulatory Compliance and Data Privacy
Regulatory pressures continue to intensify as governments worldwide respond to escalating cyber threats. In late 2024, the Biden administration proposed new cybersecurity rules aimed at limiting the impact of healthcare data breaches, with estimates suggesting the new measures could cost approximately $9 billion in the first year alone.
The rise of ransomware attacks further accelerates the demand for cybersecurity solutions. In 2023 alone, companies reportedly paid a record $1.1 billion in ransom according to a report from Chainalysis. These alarming trends contribute to broader economic implications, with projections from Cybersecurity Ventures estimating that global cybercrime damages could reach $10.5 trillion annually by 2025.
Our Methodology
For this list, we analyzed the Global X Cybersecurity ETF holdings, which focus on stocks with strong cybersecurity performance. We then cross-referenced these holdings with Insider Monkey’s Q4 2024 data of billionaire holdings to identify the companies in the ETF with the highest number of billionaire investors. Ranking these companies based on billionaire interest, we compiled a list of the best cybersecurity stocks that showcase strong performance trends and are highly favored by billionaires.
At Insider Monkey, we are obsessed with hedge funds. 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. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
An employee standing in front of a large data center, looking toward the future of cloud security.
Zscaler, Inc. (NASDAQ:ZS)
Number of billionaire investors: 11
Dollar value of holdings: $930,319,563
Zscaler, Inc. (NASDAQ:ZS) provides a cloud-native, multi-tenant security platform designed to secure user access to cloud resources based on identity, context, and business policies.
Zscaler, Inc. (NASDAQ:ZS) has strengthened its cybersecurity platform with the launch of Zscaler Asset Exposure Management. It is a new Cyber Asset Attack Surface Management (CAASM) solution designed to enhance asset risk visibility and security gap mitigation. Built on ZS’s Data Fabric for Security, the platform aggregates data from hundreds of sources, leveraging 500 billion daily security transactions and insights from over 50 million devices to identify, prioritize, and remediate security risks.
For Q2 FY2025, the company reported $647.9 million in revenue, a 23% year-over-year increase. Zscaler, Inc. (NASDAQ:ZS) narrowed its GAAP net loss to $7.7 million, significantly improving from $28.5 million in Q2 FY24, while non-GAAP net income rose to $127.1 million from $99.4 million. Non-GAAP EPS grew to $0.78, up from $0.63, reflecting stronger operational efficiency. Free cash flow increased to $143.4 million compared to $100.8 million in Q2 FY24. With cash and short-term investments rising to $2.88 billion, an increase of $470.6 million since July 2024, ZS remains financially strong, reinforcing its leadership in cloud security and Zero Trust adoption.
Analyst Tal Liani from B of A Securities upgraded the stock from Hold to Strong Buy, increasing the price target from $215 to $240.
Overall, ZS ranks 6th on our list of best cybersecurity stocks to buy according to billionaires. While we acknowledge the potential for ZS as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ZS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
