Many artificial intelligence (AI) stocks have experienced significant growth over the past year, but some experts believe that these valuations may be inflated. For investors who may have missed the AI wave, there are still lucrative opportunities in other areas of the tech sector. One such area is cybersecurity, which has become increasingly important in our digital age. Three cybersecurity stocks in particular—CyberArk Software, Zscaler, and SentinelOne—offer high growth potential that could make investors much richer.
CyberArk Software focuses on countering internal threats to an organization’s infrastructure, such as disgruntled employees and corporate spies. With over 8,000 customers worldwide, including major Fortune 500 companies, CyberArk has established itself as a leader in the privileged access management (PAM) market. Analysts predict that the global PAM market will continue to grow at a compound annual growth rate (CAGR) of 21.5%. While CyberArk expanded its cloud-based subscription services and temporarily turned unprofitable, analysts expect its earnings to turn positive again in 2023 and more than quadruple by 2025. Despite its steep valuation, CyberArk’s early mover advantage and long-term growth potential make it an attractive investment.
Zscaler focuses on protecting against internal threats by providing zero trust tools that treat everyone as a potential threat. Unlike other companies that install their services on-site, Zscaler offers cloud-native services, which are easier to scale and don’t require physical infrastructure. With over 7,500 customers worldwide, including prominent organizations in the Global 2000, Zscaler has experienced substantial revenue growth. Although its growth slowed due to macroeconomic headwinds, analysts still expect it to grow at a CAGR of 26% from fiscal 2023 to fiscal 2026. Zscaler’s cloud-native advantage positions it well to outpace the broader zero-trust market as organizations prioritize digital defense.
SentinelOne, a relatively new player in the cybersecurity sector, aims to disrupt the industry by replacing human analysts with AI algorithms on its Singularity platform. The company has demonstrated impressive growth since its IPO, with revenue doubling each fiscal year. Analysts project a CAGR of 31% from fiscal 2024 to fiscal 2026. While SentinelOne’s stock is currently below its IPO price and faces competition from larger players, its expansion and evolution could lead to significant stock gains in the coming years.
While investing in these cybersecurity stocks carries risks, their strong growth potential makes them compelling alternatives for those who may have missed out on the AI boom. CyberArk Software’s long-standing presence in the PAM market, Zscaler’s cloud-native advantage, and SentinelOne’s AI-driven approach position these companies for continued success. As organizations increasingly prioritize cybersecurity, these stocks could provide significant returns for shrewd investors.
As with any investment, it is important for individuals to conduct thorough research and consider their own financial goals and risk tolerance before making any investment decisions.
