4 Cybersecurity Stocks Set to Shine in the AI-Driven Digital Era

In today’s digital-first economy, cybersecurity has moved from the sidelines to the spotlight. It's no longer a back-office concern. It’s now a boardroom priority. Every day, companies face an onslaught of cyberattacks that are not only more frequent but also more sophisticated. From ransomware shutdowns to data leaks and phishing schemes, the financial and reputational damage is enormous. According to a report by Statista, worldwide cybercrime costs are expected to skyrocket from $9.22 trillion in 2024 to $15.63 trillion by 2029, highlighting the urgent need for advanced security solutions.

Unsurprisingly, the cybersecurity market is surging. Fortune Business Insights estimates the global cybersecurity market will grow from $193.73 billion in 2024 to $562.72 billion by 2032, reflecting a compound annual growth rate (CAGR) of 14.3%. This growth is driven by increasing enterprise IT complexity, rising regulatory scrutiny, and the intensifying need to protect data, identities and infrastructure in real time. Companies like Check Point Software Technologies Ltd. CHKP, Palo Alto Networks, Inc. PANW and F5 Inc. FFIV are capitalizing on this growth with innovative and advanced solutions designed to combat cyber threats.

As cyber threats evolve, so do the methods of combating them. Artificial intelligence (AI) is revolutionizing the cybersecurity landscape, enabling companies to detect, prevent and respond to attacks more efficiently than ever before. Traditional security frameworks struggle to keep pace with modern cyber threats, which are evolving at an unprecedented rate. However, AI can analyze massive amounts of data, detect anomalies and identify potential breaches in real time, providing a more proactive approach to security.

Several leading cybersecurity firms are heavily investing in AI-driven security solutions to stay ahead of emerging threats. Companies such as Fortinet, Inc. FTNT, Zscaler, Inc. ZS, Okta, Inc. OKTA and Qualys, Inc. QLYS are integrating AI into their platforms, enhancing their ability to protect enterprises from sophisticated cyberattacks. These firms are not only improving their security capabilities but also positioning themselves for long-term growth in a rapidly expanding market.

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4 Cybersecurity Stocks to Watch

Okta specializes in identity and access management (IAM), helping enterprises ensure that the right users have access to the right resources. The company is significantly ramping up its AI capabilities to stay ahead in the evolving cybersecurity landscape, particularly as digital identities become more complex with the rise of machine agents and generative AI.

Its latest innovation, Identity Threat Protection with Okta AI, integrates machine learning and behavioral analytics to assess identity risks in real time. This solution continuously monitors user behavior, device context and login patterns to proactively detect and mitigate threats, allowing enterprises to enforce adaptive access policies that respond dynamically to risk signals.

OKTA exited the fourth quarter of fiscal 2025 with 19,650 customers. Customers with more than $100,000 in Annual Contract Value (“ACV”) increased 7% year over year to 4,800. Okta added 25 customers with $1 million-plus ACV in the reported quarter. Okta Identity Governance has been gaining traction with more than 1,300 customers and $100 million in ACV.

The company’s growing traction with Fortune 500 clients and its expanding total addressable market make this Zacks Rank #2 (Buy) stock a compelling long-term bet. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Qualys focuses on vulnerability management, compliance and cloud security, areas that have become essential as enterprises move workloads across hybrid and multi-cloud environments. The company is strategically enhancing its AI capabilities to strengthen its position in the growing vulnerability management and cloud security market.

Qualys recently integrated advanced AI models into its TotalCloud and VMDR (Vulnerability Management, Detection and Response) platforms, allowing for faster detection, prioritization and remediation of security threats. By leveraging AI to analyze vast volumes of threat data, Qualys enables enterprises to automate threat triage and focus on the most critical vulnerabilities with precision.

As cyber threats become more sophisticated, Qualys’ AI-powered, cloud-native 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.

Fortinet is a global leader in network security, offering a comprehensive suite of cybersecurity solutions, including next-generation firewalls, endpoint security and AI-driven threat intelligence. Unlike many of its competitors, Fortinet differentiates itself by providing high-performance security solutions at a lower cost, making it an attractive choice for enterprises looking for cost-efficient cybersecurity solutions.

The company’s FortiAI platform employs deep learning to automate threat detection and response, reducing the time it takes to identify and neutralize cyber threats. Fortinet has also integrated AI-driven analytics into its FortiGuard Security Services, enhancing its predictive threat intelligence capabilities.

Fortinet stands out for its strong financial performance, consistently delivering profitability and robust free cash flow. Its expanding market share reflects the growing demand for its AI-enhanced security solutions, particularly among enterprises seeking high-performance protection at competitive pricing. With a solid balance sheet and continued investment in AI-driven security innovations, this Zacks Rank #3 (Hold) company remains a compelling choice for investors looking to capitalize on cybersecurity’s long-term growth.

Zscaler is a pioneer in zero-trust security, a crucial framework as organizations move to cloud-based infrastructures. Its cloud-native Zscaler Zero Trust Exchange platform ensures that only authorized users can access corporate resources, regardless of location or device. This model is particularly important as cyber threats targeting remote workers and cloud applications continue to rise.

Zscaler has made significant advancements in AI-powered security analytics, enhancing visibility into network activity and allowing organizations to detect and block threats before they escalate. Zscaler serves more than 45% of Fortune 500 companies, highlighting its growing enterprise adoption. Its strong customer retention rate, consistently above 120%, underscores the effectiveness and value of its security solutions.

Zscaler’s financial performance has remained robust, with expanding revenues driven by demand for its AI-enhanced security offerings. As businesses and governments continue prioritizing zero-trust frameworks, this Zacks Rank #3 company is well-positioned to benefit from this long-term trend.

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