4 Cybersecurity Leaders to Add to Your Portfolio Before 2025 Kicks Off – December 16, 2024

As technology continues to shape our world, the digital realm has become both a catalyst for progress and a hotbed for security threats. 2025 presents a formidable cybersecurity landscape defined by escalating risks and a rapidly evolving threat matrix. This environment poses significant challenges for individuals, businesses and governments, demanding robust solutions to safeguard digital resilience.

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Cyber threats are now more diverse and sophisticated than ever, ranging from ransomware attacks and supply-chain vulnerabilities to the exploitation of zero-day flaws. Cybercriminals now wield advanced tools, targeting critical infrastructure and networks with precision.

The interconnected digital ecosystem, fueled by artificial intelligence (AI), the Internet of Things (IoT) and expanded remote work models, has significantly widened the attack surface. This complexity makes defending against these threats increasingly challenging, especially as geopolitical tensions and state-sponsored cyber espionage heighten risks globally.

Generative AI (GenAI) is both a revolutionary tool and a double-edged sword in the cybersecurity domain. While its applications promise transformative innovations, GenAI also amplifies the scale of threats. Cybercriminals now exploit large language models (LLMs) to execute large-scale social engineering attacks with unprecedented precision. By 2027, Gartner predicts that GenAI will be implicated in 17% of all cyberattacks, underscoring the urgent need for enhanced cybersecurity measures.

This evolving threat necessitates increased investment in securing AI-driven technologies. Organizations are channeling resources into application security, data privacy and infrastructure protection to counteract the vulnerabilities introduced by GenAI. As a result, cybersecurity spending is projected to grow significantly, with Gartner forecasting a 15% rise in global end-user security spending in 2025.

Bet on These Cybersecurity Stocks Amid Positive Trend

The surge in cyber risks has elevated the role of cybersecurity as a fundamental pillar for protecting sensitive information and critical infrastructure. Organizations are turning to innovative solutions to bolster their defenses, paving the way for firms specializing in advanced security technologies to thrive in this challenging environment.

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Here, we have picked four stocks — Fortinet, Inc. (FTNT Quick QuoteFTNT – Free Report) , Zscaler, Inc. (ZS Quick QuoteZS – Free Report) , Qualys, Inc. (QLYS Quick QuoteQLYS – Free Report) and Okta, Inc. (OKTA Quick QuoteOKTA – Free Report) — that are strategically positioned to ride the waves of a challenging security landscape in 2025. These stocks have a favorable combination of a Growth Score of A or B and a Zacks Rank #1 (Strong Buy) or #2 (Buy).

The Growth Style Score condenses all the essential metrics from a company’s financial statements to get a true sense of the quality and sustainability of its growth. Per Zacks’ proprietary methodology, stocks with a combination of a Zacks Rank #1 or #2 and a Growth Score of A or B offer solid investment opportunities.

Our Picks

Fortinet is a provider of network security appliances and Unified Threat Management (“UTM”) network security solutions to enterprises, service providers and government entities worldwide. The stock currently sports a Zacks Rank #1 and has a Growth Score of B. You can see the complete list of today’s Zacks #1 Rank stocks here.

Fortinet’s rich experience in the security space and continued delivery of mission-critical solutions will help it maintain and grow its market share in the cybersecurity space. Moreover, the growing adoption of Software-Defined Wide Area Network (SD-WAN) solutions could be a key growth driver for Fortinet in the long run. Continued deal wins, especially those of high value, are a key driver. The focus on enhancing its UTM portfolio through product development and acquisitions is a tailwind.

The Zacks Consensus Estimate for 2025 earnings has been revised upward to $2.35 per share from $2.17 per share over the past 60 days.

Zscaler offers a full range of enterprise network security services, including web security, internet security, antivirus, vulnerability management, firewalls and control over user activity in mobile, cloud computing and Internet of Things environments.

Zscaler is benefiting from the rising demand for cyber-security solutions due to the slew of data breaches. The increasing demand for privileged access security in digital transformation and cloud migration strategies is a key growth driver. A strong presence across verticals, such as banking, insurance, healthcare, public sector, pharmaceuticals, telecommunications services and education, safeguards it from the negative impacts of ongoing macroeconomic headwinds. Portfolio expansion through acquisitions with the likes of Avalor, Canonic Security and ShiftRight is praiseworthy.

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Zscaler carries a Zacks Rank #2 and has a Growth Score of A at present. The Zacks Consensus Estimate for fiscal 2025 earnings has been revised upward by 14 cents in the past 30 days to $2.99 per share.

Qualys is a provider of cloud security and compliance solutions that enable organizations to identify security risks to their information technology infrastructures and help protect their IT systems and applications from cyber-attacks.

Qualys is gaining from the surging demand for security and networking products amid the growing hybrid working trend. Accelerated digital transformations by organizations are also fueling the demand for the company’s cloud-based security solutions. QLYS’ solutions are provided through its QualysGuard Cloud Platform. QLYS offers products for vulnerability management, policy compliance, web application scanning, malware detection and associated security products.

The stock carries a Zacks Rank #2 and has a Growth Score of B. The Zacks Consensus Estimate for 2025 earnings has been revised upward to $6.02 per share from $5.81 per share over the past 60 days.

Okta provides a wide range of identity, access and authentication solutions for small and medium-sized businesses, universities, non-profits and government agencies within the United States and abroad. The company’s secure and neutral cloud-based platform allows users to integrate with nearly any application, service or cloud.

Okta is likely to continue benefiting from the increased use cases of identity solutions. Okta Identity Cloud’s capability to consolidate and easily integrate existing applications without compromising security or stability is attracting customers. Okta products’ ability to automate processes, secure data and reduce costs has been an upside.

Expanding clientele has been a key catalyst. The company ended the third quarter of fiscal 2025 with 19,450 customers, adding 150 customers during the quarter despite the challenging macroeconomic environment. Customers with more than $100K in Annual Contract Value increased 8% year over year.

The stock carries a Zacks Rank #2 at present and has a Growth Score of A. The Zacks Consensus Estimate for fiscal 2025 earnings has been revised upward to $2.76 per share from $2.61 per share over the past 30 days.