2 Cybersecurity Stocks You Can Buy and Hold for the Next Decade

Source The Motley Fool

Cybersecurity threats are always lurking, and companies of all sizes must constantly stay vigilant to protect their data and their customers' privacy. Staving off new threats is getting more difficult because criminals and rogue nations are now using artificial intelligence (AI) to make threats more sophisticated.

The good news is that some competent companies are working hard to counter these threats. The even better news for investors is that a handful of cybersecurity stocks could make great investments over the next decade. Here are two of them.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. See the 10 stocks »

A person looking at a tablet.

Image source: Getty Images.

1. Palo Alto Networks

Palo Alto Networks (NASDAQ: PANW) has been a major player in cybersecurity for years. The company may be best known for its firewalls, but it has expanded its portfolio to include an array of offerings, from cloud protections with its Prisma product to an artificial intelligence-based system with Cortex.

Palo Alto benefits from a massive customer base that exceeds 80,000 enterprise customers. Results from its fiscal 2025 first quarter, which ended Oct. 31, 2024, were solid, with revenue increasing 14% to $2.1 billion and non-GAAP diluted earnings per share rising 13% to $1.56. Management expects growth to keep chugging along, with revenue guidance of more than $9.1 billion for fiscal 2025, up 14% from its fiscal 2024.

If there's one negative for investors here, it's that the company's stock is expensive. Palo Alto trades at a forward price-to-earnings ratio of 56.8, significantly higher than the S&P 500's forward P/E ratio of 21.9. Still, Palo Alto holds a more than 22% share of the security appliance vendor market, leading Fortinet and Cisco, and its recent growth indicates that it could have more room to run.

2. CrowdStrike

CrowdStrike (NASDAQ: CRWD) has been on the leading edge of cybersecurity for years, allowing customers to implement cloud-based solutions on the company's Falcon platform.

Recently, CrowdStrike improved Falcon by launching Charlotte AI, an artificial intelligence system that helps security analysts triage threats. On the earnings call for its fiscal third quarter, which ended Oct. 31, management said that the use of Charlotte AI grew at a triple-digit percentage rate, propelled by demand for the time savings and workflow automation it could provide.

CrowdStrike's revenue grew by an impressive 29% in fiscal Q3 to $1 billion, and non-GAAP diluted earnings per share rose by 13% to $0.93.

Its shares are trading at a premium right now, with a forward P/E ratio of 78.4. But with its share price down about 8% over the past six months (as of this writing), investors have an opportunity to buy shares for slightly less than they were changing hands for in mid-2024.

If you're hesitant to buy these cybersecurity stocks because of their premium valuations, starting by opening small positions and steadily adding to them over time might be a good strategy. The AI-based cybersecurity market is growing rapidly and, according to a 2022 study by Acumen Research and Consulting, could reach a value of $133.8 billion by 2030 (from $14.9 billion in 2021). That gives these two stocks a lot of opportunity to continue growing in the coming years.

Should you invest $1,000 in Palo Alto Networks right now?

Before you buy stock in Palo Alto Networks, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Palo Alto Networks wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $885,388!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.

See the 10 stocks »

*Stock Advisor returns as of December 30, 2024

Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Cisco Systems, CrowdStrike, and Fortinet. The Motley Fool recommends Palo Alto Networks. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Bitcoin Bull Run at Risk as Whales Sell and Retail Buys In LateThe tug of war between Bitcoin bulls and bears since the asset reached its all-time high of $122,054 on July 14 has kept prices largely rangebound. 
Author  Beincrypto
Aug 08, Fri
The tug of war between Bitcoin bulls and bears since the asset reached its all-time high of $122,054 on July 14 has kept prices largely rangebound. 
placeholder
Gold Price Forecast: XAU/USD remains capped under $3,400 ahead of US inflation dataThe Gold price (XAU/USD) attracts some sellers to near $3,390 during the early Asian session on Monday.
Author  FXStreet
5 hours ago
The Gold price (XAU/USD) attracts some sellers to near $3,390 during the early Asian session on Monday.
placeholder
EUR/USD holds gains around 1.1650 due to cautious tone surrounding ECB outlookEUR/USD edges higher after registering losses in the previous session, trading around 1.1650 during the Asian hours on Monday.
Author  FXStreet
5 hours ago
EUR/USD edges higher after registering losses in the previous session, trading around 1.1650 during the Asian hours on Monday.
placeholder
Ethereum Surges Past $4,300 as Markets Await Pivotal CPI DataOver the weekend, Fed Vice Chair Michelle Bowman’s unexpected remarks fueled Ethereum’s surprise rise.
Author  Beincrypto
4 hours ago
Over the weekend, Fed Vice Chair Michelle Bowman’s unexpected remarks fueled Ethereum’s surprise rise.
placeholder
Top 3 Price Prediction: BTC nears record highs, ETH and XRP follow suitBitcoin (BTC), Ethereum (ETH), and Ripple (XRP) kicked off the week on a bullish note, with BTC inching closer to its record high of $123,218.
Author  FXStreet
3 hours ago
Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) kicked off the week on a bullish note, with BTC inching closer to its record high of $123,218.
goTop
quote