The threat of cyber crimes is on the rise, making cybersecurity stocks one of the biggest investment trends for the next decade. Demand for robust cybersecurity solutions continues to grow exponentially.
According to Mckinsey and Company, the total addressable market for cybersecurity could amount to approximately $2 trillion. They estimate that it could be worth approximately 10X the vended market, and continued innovation in the sector will drive market penetration. Additionally, generative AI will be a huge growth tailwind for cybersecurity in threat detection and cloud security. With this backdrop, the cybersecurity sector presents investors with ample opportunity for explosive gains.
Now, let’s unpack the top cybersecurity stocks to buy for 2024!
Palo Alto Networks (PANW)
Palo Alto Networks (NASDAQ:PANW) has established itself as the largest cybersecurity company by market capitalization. They are a dominant force in the cybersecurity sector, particularly known for their next-generation firewalls.
Palo Alto Networks firewalls go beyond traditional packet filtering, offering advanced threat prevention, application security, and URL filtering capabilities. The company holds a comprehensive portfolio of cybersecurity products to address a wide range of threats. This includes advanced persistent threats (APT), malware, ransomware, and data breaches. Furthermore, they have been actively expanding their partnerships, most recently, with Nvidia and other 5G providers to advanced private 5G security solutions. As revenue growth, profitability, and FCF continues to accelerate, PANW stock remains one of the top cybersecurity stocks for explosive gains.
Check Point Software (CHKP)
Check Point Software (NASDAQ:CHKP) is a cybersecurity veteran with a proven track record of innovation and growth. The company offers a broad range of cybersecurity solutions, including firewalls, threat detection, end-point, and cloud security solutions.
Check Point boasts a loyal customer base, with a large percentage of recurring revenue from existing customers. They are investing heavily in the AI-powered cloud security race, with their XD Horizon XDR/HD platform. This platform will provide significant long term revenue growth opportunities, as they look to be the leader in threat prevention and detection. In FY23, Check Point’s revenue growth was not too impressive. However, they managed to grow EPS 12% YOY to $7.10 per share while generating $1 billion in FCF from operations. Moreover, they recently announced a partnership with Nvidia to secure AI cloud infrastructure. With global cybersecurity and risk management spending on the rise, Check Point’s strong operating margins make it well positioned to accelerate profitability over the next decade.
Fortinet (FTNT)
Fortinet (NASDAQ:FTNT) is undoubtedly one of the best cybersecurity stocks to snap up in 2024. They offer a wide array of cybersecurity solutions from intrusion prevention systems and endpoint security to secure access service edge (SASE) offerings.
Fortinet stock has been a rocketship over the last several years. This is largely attributed to their accelerated revenue growth and profitability. FTNT stock has risen 269% over the last 5 years, as compared to the S&P 500 79% over the same period. The company’s gross billing volume has been growing exponentially as their flagship Fortigate firewall drove demand. In the 2023 fiscal year, their profitability increased substantially with EPS up 42% YOY to $1.46 per share. Furthermore, FCF swelled to $1.73 billion and net earnings eclipsed $1 billion for the first time. If you’re looking for a leader in the cybersecurity space, then look no further than this transformative company.
On the date of publication, Terel Miles did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
