As more of the world’s technology moves online, the demand for cybersecurity stocks to buy will continue to increase. Seen in nearly every major part of any tech company’s operational expenditures, it’s no wonder its market is currently valued at over $200 billion and set to continue increasing at a near 10% compound annual growth rate (CAGR). Used by cloud computing services, B2B software companies and AI companies, cybersecurity has become a necessity to provide stability and customer satisfaction.
Despite cybersecurity’s importance, it is a relatively small sector compared to other technologies. Thus, identifying the growing winners in such an emerging industry can easily be a winning strategy for savvy investors. Here are three cybersecurity stocks to buy now for a massive run in 2025. Who knows, maybe these companies will put you into the million-dollar club as well!
Crowdstrike (CRWD)
Crowdstrike (NASDAQ:CRWD) is an American cybersecurity company that has been a trailblazer for integrating AI into its security services. The stock has already returned 40% this year, and analysts still remain bullish. Wall Street currently has an average price target of $399.03 and a high-end target of $540. At these targets, that would represent a 15% and 60% upside from the stock’s current price!
This company has done an excellent job in uniquely approaching cybersecurity. It has created a single mesh network that allows all users to benefit from any threats, no matter who receives them. This creates an efficient and scalable platform, called Falcon, to identify and neutralize threats without any human intervention. This innovative and resilient business model is evidenced by a 34% year-over-year increase in its Annual Recurring Revenue or ARR last quarter.
As you might expect with a company providing a five-year revenue CAGR of 65%, the stock is trading at a high multiple. Shares of CRWD trade at 27.5x sales and 88.5x forward earnings. However, given its current hyper-growth focus, CRWD definitely remains one of the cybersecurity stocks to buy for those looking to join the millionaire’s club in 2025.
Palo Alto Networks (PANW)
Palo Alto Networks (NASDAQ:PANW) was originally a firewall business that has recently migrated into cybersecurity. Wall Street analysts have an average price target of $335.87, about 5.0% higher than the current price. The Street’s higher target for PANW sits at a lofty $405 per share.
This company started off with network security and firewalls, which might tell you about how long Palo Alto has been around. However, its focus more on cybersecurity and cloud security as of recent has reflected its decision to move into new markets and strengthen its competitive edge. One of its biggest developments is its integration of AI into its services with its new Precision AI™, which allows customers to increase their ability to block more advanced threats. For investors looking for potential driving catalysts, Palo Alto has recently come under more coverage ever since headlines of former House Speaker Nancy Pelosi taking a bullish call position in the stock worth up to $1.25 million.
Due to its current business model shift, it’s no wonder the stock has taken quite a hit in its last quarterly earnings and valuation metrics. However, PANW’s current 14.8x sales and 51x forward earnings have also opened up the opportunity to a relatively discounted company when compared to CRWD. While CRWD does provide more upside to investors, I would suggest all investors look out for PANW’s upcoming earnings on May 20th to see how PANW intends to continue evolving.
SentinelOne (S)
While SentinelOne (NYSE:S) is a much smaller company than Crowdstrike and Palo Alto Networks, this rapidly growing cybersecurity is definitely one worth keeping your eye on. So far, this stock has flown under the radar as shares are down nearly 15%, lagging behind both its sector and the benchmark S&P 500. Nonetheless, analysts do still hold out hope for SentinelOne with a street-high target of $40 — nearly double its stock price today.
SentinelOne’s offerings are often compared to the likes of Crowdstrike, whose Falcon platform is often competitively pitted against SentinelOne’s Singularity. However, upon closer look, it’s interesting to see Singularity’s edge in relatively faster cybersecurity response and ability to work without an internet connection. While it does have some flaws in its scalability, we see this as largely combated by SentinelOne’s highly sticky and satisfied customer base, and a potential channel for SentinelOne to grow market size in the future.
SentinelOne recently reported strong financial results. Not only did the company report an industry-leading revenue growth of 47%, but it saw operating margins improve by more than 30 points YOY. Given that SentinelOne is already making improvements to shift to larger recurring enterprises to strengthen its competitive edge, investors should definitely keep this high-risk, high-reward company on their radar.
On the date of publication, Ian Hartana and Vayun Chugh did not hold (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.
