The cybersecurity industry was worth around 184.19 billion US dollars in 2020 and is expected to grow to 248.26 billion by 2023. Cybersecurity is one of the fastest technology industries and it’s a great place to invest your money within the stock market. Most likely all the major players within the cybersecurity industry will see good growth in the next few years but to help you maximize on your returns I prepared a list of 8 high potential cybersecurity stocks that you should consider buying in 2021. If you like any of these options and would like to learn more about them I highly recommend using the website Motley fool as one of your research tools. They give great breakdowns on all major stocks including the ones I have on this list.
CyberArk Software (NASDAQ:CYBR)
First on the list is CyberArk, CyberArk is a software that offers privileged account security. Privileged accounts refer to accounts that have higher than normal levels of access such as an admin account. Account’s like this are the most important to protect because they have permissions to do a lot of things that a regular user account can’t do, therefore if someone is able to hack these accounts they can do a lot of damage to the company. Also, it will be hard for the security team to detect when one of these accounts has been hacked because it will appear as if a legitimate employee is performing these actions. Simply put cyberark specializes in preventing privileged accounts from being hacked. It’s software is primarily used in financial services, energy, retail, healthcare and government markets. It’s annual recurring revenue (ARR) has reached over $250 million in the third quarter of 2020 and is expected to increase going into 2021.
Crowdstrike is an American cybersecurity company that provides endpoint security, threat intelligence and cyberattack response services. One of the crowdstrike’s competitive advantages includes being platform -agnostic, it works well on Linux, Mac and Windows environments. It also leverages AI algorithms to detect new threats and the fact that cybersecurity solutions typically have high switching costs has allowed them to retain a significant amount of customers in the past and will continue to do so going into the future. You can see Crowdstrike growth over the last 3 years below:
Palo Alto Networks (NYSE:PANW)
Palo Alto is another American cybersecurity company and is the largest security software vendor according to revenue. It’s well known for it’s advanced firewalls and cloud-based solutions. It’s not expected to be the most explosive cybersecurity stock in 2021 but given it’s track record and size it’s a stable long term play. 70% of the fortune 100 companies are now using Palo alto compared to 43% six months ago so it’s growth is very promising, probably one of the most promising of this list. You can find some details below:
Fortinet is yet another cybersecurity company based in the US and headquartered in California. Fortinet creates a wide range of cybersecurity products including both software and hardware. Fortinet has had double digit sales growth for the last few years and is one of the fastest growing cybersecurity stocks going into 2021. You can read a full breakdown of it’s potential here.
Zscaler is a cloud security provider who’s stock has increased more than 200% since January 2020. It’s been having huge growth, probably spurred on by the huge shift to working at home. However, this may be a concern because once the lockdown is over and people aren’t working from home as much we don’t know what effect this may have on the stock. But overall this stock is promising and definitely one to consider given it’s quick rise in the last year.
Splunk is one tool that almost every cybersecurity professional has used or heard of. Splunk as a tool focuses on the data analytics part of cybersecurity, combing big data analytics to help companies improve their cybersecurity operations and detect potential threats to the company. It collects data from all devices on a companies network then aggregates and organizes that data into information that can be used to find malicious activity. It’s very popular within the industry and as a result has had great growth in the last 5 years from about $46 to $173 at the time of this post.
Blackberry (NYSE: BB; TSX: BB)
John Chen CEO of blackberry had this to say following blackberry’s acquisition of Cylance, a privately held artificial intelligence and cybersecurity company based in California. “Today Blackberry took a giant step forward toward out goal of being the world’s largest and most trusted AI-cybersecurity company”. This statement clearly shows their intent, which is being backed up by big investments. As a result blackberry’s stock has increased by over 30% in the last 3 months. While blackberry has fallen off in the last few years, lately they have been making some serious changes. You can read the full story here, as John Chen discusses how this acquisition will help them establish a position in the cybersecurity market and in the development of their AI driven solution blackberry spark.
VMware is more well known for their cloud computing and virtualization software but has recently made an interesting acquisition with carbon black. Carbon Black developed a cloud based endpoint security software that was used to monitor computer networks for malicious behavior and to some extent prevent malicious files from infecting an organization. This acquisition may be an indicator that VMware is going to be making a serious move into the cybersecurity industry in the future, I wouldn’t buy this stock yet as a cybersecurity play but it might be worth keeping an eye on.