Investing in Cybersecurity: 10 Stocks Worth Watching in 2023
Date: 16 June 2023
Cybersecurity technologies are evolving, and with it, the value of the industry. It is worth considering cybersecurity and related industries as lucrative investment avenues in 2023.
A look at the numbers explains why cybersecurity should be on the watchlist of those looking to build wealth through stock investing. In 2023, the revenue from the cybersecurity sector is set to surpass $160 billion.
Today, we’re going to break down why you should be investing in the cybersecurity sector and list the ten must-watch stocks in 2023.
Let’s take a look…
Top Cybersecurity Stocks to Watch in 2023
#1. Palo Alto Networks (PANW)
Palo Alto Networks is in the game of firewalls, being founded in 2005, long before many of the companies on this list. New interests have been piqued in Palo Alto, not due to its classic firewall services but for its progression in the cloud.
Over the years, the company has acquired a number of smaller cloud-based businesses. This steady growth in the cloud makes PANW one of the best-performing cybersecurity funds in 2023.
#2. Akamai (AKAM)
Akamai is a content delivery network that handles the security of data in transit. Without leaders like Akamai, downloading, streaming, and browsing would be a much more dangerous hobby.
Akamai’s recent focus has been on “edge computing.” Like cloud computing was in the 2010s, edge-computing stocks are becoming top performers in this decade.
#3. SentinelOne (S)
The recently listed pure-play cybersecurity company, SentinelOne, exploded onto the stock market. Their Initial Public Offering in June 2021 pulled in over $1 billion and marked the highest IPO for a cybersecurity company ever.
While stock prices have fallen below the IPO, SentinelOne is still showing increased sales year-over-year and performing well on the market.
#4. CrowdStrike Holdings (CRWD)
Specializing in endpoint security (protecting your laptops, devices, etc.), CrowdStrike Holdings has seen big fluctuations in stock price over the past year.
Nevertheless, CRWD has been excelling due to CrowdStrike’s machine-learning technology, presenting a valuable stock option for investors.
#5. Leidos Holdings (LDOS)
While the majority of their work is done with US government agencies, Leidos Holding's stock is a worthwhile investment. After a drop in earnings after the first quarter of this year, new CEO Tom Bell has brought confidence back to investors.
Previously the head of Rolls Royce North America, Bell’s involvement has seen LDOS grow at a rapid pace.
#6. Fortinet (FTNT)
If you’ve been around the cybersecurity sphere for long enough, you’d have heard of Fortinet. Like Palo Alto, this company has been around since the early-2000s but shows no signs of age.
Rather than acquisition, Fortinet has slowly built its own cloud-security infrastructure. Investors are confident in FTNT's growth due to the huge demand for firewalls in new data centers and mobile networks.
#7. Cisco Systems (CSCO)
You’ve seen their name on landline phones, routers, and more. Cisco Systems is a monolith in the communications sector but has made a name for itself in the cybersecurity industry.
Due to increases in subscription-based and software sales, CSCO has seen important growth, drawing the eyes of investors.
#8. Datadog (DDOG)
This cloud-native platform was built to collect cloud-based data for insights. Using AI for automated tools, Datadog is loved by IT teams for the amount of work it saves them.
Recent expansions to the platform have introduced cloud security and data monitoring, making DDOG a stock to watch in 2023.
#9. Check Point Software Technologies (CHKP)
Check Point has become a leader in the field of cybersecurity solutions for corporations and governments. Announcing slowed sales in Q1 of 2023, investors began to turn away from CHKP stocks.
Yet, with the launch of their new threat-assessment platform, “Infinity Global Services,” CHKP stocks are definitely worth watching.
#10. Zscaler (ZS)
Offering cloud-based security solutions, Zscaler is another pure-play cybersecurity company to monitor in 2023. Seeing rapid increases in sales, investors are more interested in Zscaler’s strides in end-user monitoring.
With millions now adopting a hybrid work style, end-user monitoring will become crucial to personal cyber hygiene. This has placed Zscaler in the perfect spot to capitalize on the remote work boom.
Why should you invest in cybersecurity?
For those just beginning their investing journey, it's a valid question - why invest in cybersecurity?
As we make our way through the 21st century, our dependence on technology continues to grow. With all of our banking, social media, and communications on one device, cybersecurity hasn’t just become popular — it’s become necessary.
Investments in cybersecurity stock have performed strongly due to:
- Major advancements in individual and enterprise security;
- Renewed interest due to business changes, hires, trends, etc.;
- Increasing business and government need for cybersecurity products/services due to the rising threat of cyber crime and ransomware;
- Overwhelming hype over new digital/connected products or services;
- Thousands of users adopting cybersecurity tools every day.
As billions of users subscribe to or purchase security, the value of cybersecurity companies will continue to increase.
Know the risks
It’s extremely important to understand the risks involved in stock investing. A common misconception is that stock investing is the same as gambling. While this statement is false, there are very similar risks involved.
If you’re new to investing but have a long history of making risky investments, ensure that you take a Risk Profile Test. This quick quiz will determine your risk factor regarding investing and how much of a hit you’d take after a loss.
Also, take care of your sensitive information, like your IP address and the data you transmit. For that, ensure you’re connected to the internet with a Virtual Private Network (VPN). Read about Surfshark vs Proton to decide what VPN provider suits you best.
Cybersecurity companies are becoming more valuable by the day as our modern lives require increased cyber protection. As sales skyrocket, smart investors can rake in huge returns by betting on the right company.
In 2023, the ten cybersecurity stocks listed in this article could be the investment opportunity you’ve been looking out for.