AI-Driven Security Boom Puts These 4 Cybersecurity Stocks in Spotlight

An updated edition of the Sept. 11, 2025 article.

Cyber threats are no longer occasional disruptions. Rather, they’ve become a constant business risk. From ransomware attacks to massive data breaches, companies today face relentless attempts to infiltrate their systems. The damage goes beyond financial losses. A single breach can erode customer trust and tarnish a brand’s reputation for years.

That’s why cybersecurity has become one of the fastest-growing global industries. Fortune Business Insights expects that the global cybersecurity market will jump from $193.7 billion in 2024 to nearly $563 billion by 2032, a 14.4% compound annual growth rate. This surge reflects not just stronger demand but also the growing complexity of digital networks, new compliance requirements, and the urgent need to protect critical data. Leaders like CrowdStrike Holdings CRWD, Fortinet FTNT and Check Point Software CHKP are already monetizing this demand with platforms built for modern threats.

Today’s attacks are smarter and faster than ever, and traditional security tools are falling behind. This is where artificial intelligence (AI) comes in. AI can analyze vast volumes of data and detect potential threats before they escalate. It shifts cybersecurity from reactive to proactive. The pace at which threats emerge means companies need to automate their detection and response processes, and AI is the most promising way to do that.

Companies like Cisco Systems CSCO, Palo Alto Networks PANW, SailPoint SAIL and Datadog DDOG are leaning heavily into AI. They're upgrading their platforms to detect and respond to threats more quickly and intelligently. This not only makes their products more valuable to customers but also gives them a stronger position in a fast-growing industry.

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4 Cybersecurity Stocks to Buy

Cisco Systems offers cybersecurity products and services that prevent unauthorized access to system resources and protect from worms, spam, viruses and other malware. The company has been integrating AI into its product portfolios across networking, security, collaboration and observability.

Strong demand for Cisco’s products in developing AI infrastructure has been a game-changer for the company. In fiscal 2025, the company received AI infrastructure orders from web-scale customers exceeding $2 billion.

Data center switching orders continue to register solid year-over-year growth in the fourth quarter of fiscal 2025, implying strong demand. These orders are coming from some of the biggest players in cloud computing and reflect a growing demand for AI-optimized networks. Cisco Systems is expanding its AI portfolio for data centers with new solutions like the Unified Nexus Dashboard, Cisco Intelligent Packet Flow, configurable AI PODs, and 400G bidirectional (BiDi) optics.

With the global cybersecurity market rapidly expanding, this Zacks Rank #2 (Buy) company’s deep integration of AI not only enhances its competitive edge but also provides an opportunity for sustainable revenue growth. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Palo Alto Networks offers network security solutions to enterprises, service providers and government entities worldwide. The company’s continued innovation in AI, automation and cloud security reinforces its competitive lead. AI is increasingly embedded into PANW’s offerings, which is helping it win multi-product deals through platforms like Cortex XSIAM and Prisma AI-Ready Security (Prisma AIRS).

As enterprises race to adopt generative AI, the company sees new attack surfaces forming, both in how organizations build AI and in how employees use third-party AI tools. Prisma AIRS is meant to close those gaps, providing visibility, data loss prevention and compliance safeguards. Prisma AIRS aims to protect AI models from build to deployment across hybrid and multi-cloud setups. Moreover, just weeks after launch, Prisma AIRS has already built an eight-figure sales pipeline.

As cyber threats become more sophisticated, Palo Alto Networks’ AI-powered platform gives it a competitive edge. These innovations are likely to accelerate customer adoption, drive upselling and support strong long-term revenue growth for this Zacks Rank #2 company.

SailPoint provides cloud-based identity security and access management software for enterprises. The company’s AI and machine learning (ML)-enabled offerings, including IdentityAI, IdentityNow and IdentityIQ, have helped SAIL to move beyond a legacy identity governance solution provider into a unified, intelligent security solution provider.

SailPoint’s AI/ML-enabled offerings power features like predictive access modeling, anomaly detection, automated governance, automated access reviews, access requests and access certification. These features drastically reduce manual effort, audit fatigue and risk for enterprise customers. This automation creates higher efficiency and IT security for clients, while securing this Zacks Rank #2 company's leadership in the critical, high-growth identity security segment.

Datadog is a monitoring and analytics platform for developers, IT operations teams and business users in the cloud age. This Zacks Rank #2 company is benefiting from continued innovation across its AI-powered observability platform.

To address growing demand for AI-native capabilities and concerns around observability costs, Datadog has introduced several new offerings, including LLM Observability and Flex Logs. These initiatives mark the company’s effort to stay competitive in an evolving observability landscape.

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This article originally published on Zacks Investment Research (zacks.com).

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