3 Cybersecurity Stocks to Watch Ahead of 2026 Midterms

Americans have barely caught their breath from the 2024 election cycle before the 2026 midterms come into focus. Midterm elections don’t draw the same attention as general elections, where a president is on the ballot. However, the issues drawing attention for the 2026 midterms, including cybersecurity and artificial intelligence, mean the stakes are high.

In 2024, CISA (Cybersecurity and Infrastructure Security Agency) and the FBI made securing election infrastructure one of their top priorities. CISA had a $3 billion budget to start 2025. Congress lowered the agency’s proposed budget cut to $135 million from the $495 billion proposed by the Trump administration.

Notably, many of the issues surrounding the budget cut highlight concerns over election interference from foreign adversaries. Those concerns will be front and center in 2026, which means that spending on cybersecurity is likely to increase in both the government and commercial sectors.

It also means that cybersecurity stocks are likely to have a long runway for continued gains. Cybersecurity stocks also have structural tailwinds as cyber threats evolve beyond elections to the AI-driven digital economy.

Okta: The Security Guard at the Door

Identity protection is the first line of defense in protecting voter databases and government systems, and Okta Inc. (NASDAQ: OKTA) is positioned squarely in that space. The company is a recognized leader in identity and access management (IAM). Okta's Zero Trust model focuses on granting the right level of access to the right people, for the right resources, and in the right context. 

In its first-quarter earnings report for fiscal year 2026, Okta reported continuing growth in its US public sector vertical. In fact, two of the company’s top three deals (and four out of its top 10) were in the public sector.

Like many technology stocks, OKTA stock is richly valued at around 219x forward earnings as of Aug. 25. However, the stock is down approximately 25% in the last three months, and with a consensus price target of $188.61, investors could see an increase of 29.5% in the next 12 months.

Palo Alto Networks: The All-in-One Security System

Palo Alto Networks Inc. (NASDAQ: PANW) is a recognized leader in cybersecurity. The company has recently shifted to a platformization strategy that is becoming the new normal. For government buyers, consolidating cybersecurity under one vendor reduces complexity and improves compliance with zero-trust mandates.

In its August 2025 earnings call, the company called out the U.S. government as one of its strongest verticals. Palo Alto pointed to multiyear federal zero-trust contracts and growing international government demand as durable growth drivers. As further evidence of its strong ties to the U.S. government, PANW frequently appears on congressional trading disclosures.

As is the case in most of this sector, the short-term concern about PANW stock is its valuation at approximately 115x earnings. However, the stock has had a pullback of over 9% in the last month, which may be creating a buy-the-dip opportunity.

Analysts have a consensus price target of $211.52, which is a 14% upside. Several analysts have raised their price targets since the earnings call in mid-August.

Fortinet: The Choice for Affordable But Powerful Security Hardware

If investors are looking for a cybersecurity stock that may be undervalued, they can consider Fortinet Inc. (NASDAQ: FTNT), which trades at 31x earnings. Fortinet is best known for its cost-effective firewalls and hardware.

Fortinet doesn’t chase the high-growth SaaS multiples. Instead, it serves schools, municipalities, and mid-sized businesses with reliable, lower-cost hardware that still delivers enterprise-level security.

Importantly, while FTNT stock is down due to concerns about a subdued refresh cycle, management said its government business continues to see steady demand. Although these contracts may take more time to close, they typically lead to multi-year recurring revenue streams.

That could be a reason to buy the dip in the stock, which has a consensus price target of $97.40, a 25% gain from its price on Aug. 25.

Where Should You Invest $1,000 Right Now?

Before you make your next trade, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis.

Our team has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and none of the big name stocks were on the list.

They believe these five stocks are the five best companies for investors to buy now...

See The Five Stocks Here

The article "3 Cybersecurity Stocks to Watch Ahead of 2026 Midterms" first appeared on MarketBeat.