My Top Cybersecurity Pick for 2025 Rose 37%. Is It Still a Buy in 2026?

Cybersecurity isn't talked about as much nowadays. Before 2023, cybersecurity was a top investment sector, and many were bullish on various companies in the space.

However, with the rise of artificial intelligence, it fell in popularity. This makes the segment a great opportunity for investors to get some fantastic companies at a slightly lower price than they would have been able to a few years ago.

Last year, I picked CrowdStrike (NASDAQ: CRWD) as my top cybersecurity stock for 2025. That turned out to be an excellent call, and the stock rose 37% for the year. But can CrowdStrike deliver similar returns in 2026? Let's find out.

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CrowdStrike deploys AI in its platform

CrowdStrike isn't completely separated from AI, as it uses AI in its software to detect threats and shut them down before any damage is done. With the rise of bad actors bolstered by AI capabilities, the need for top-of-the-line cybersecurity software has never been greater. This has led to outstanding growth from CrowdStrike over the past few years.

CRWD Revenue (Quarterly YoY Growth) data by YCharts

The strength is also expected to extend into next year, with Wall Street analysts projecting 22% growth for FY 2027 (ending January 2027). Management is bullish on the industry as a whole, as they believe there is a $140 billion total addressable market in cybersecurity currently, but that will expand to $300 billion by 2030. That's a huge expansion, and with CrowdStrike recognized as one of the leaders in the industry, it should be able to capitalize on that growth.

Still, CrowdStrike's revenue is growing much more slowly than its stock price rose in 2025, which raises a red flag for me. Valuation is a key concern here, but is it too expensive to buy?

CrowdStrike was still recovering from an outage in 2025

Back in July 2024, CrowdStrike's software pushed an update that caused an outage and disrupted business all around the world. CrowdStrike's stock got slammed for that, but it has since recovered and reached an all-time high. That was part of the reason CrowdStrike's stock did so well in 2025, as its valuation level was still recovering to normal levels.

CRWD PS Ratio data by YCharts

At 25 times sales, CrowdStrike's stock still isn't anything close to cheap. At the very least, I like to see software stocks growing their revenue at a higher level than the price-to-sales ratio. CrowdStrike doesn't meet this test, so I'm concerned about its potential.

I still think CrowdStrike will beat the market in 2026, but it won't have a year like 2025. I think mid-teens appreciation is likely in the cards, which is normally good enough to outperform the market. As a result, the stock may be a solid long-term buy right now.

Keithen Drury has positions in CrowdStrike. The Motley Fool has positions in and recommends CrowdStrike. The Motley Fool has a disclosure policy.