2 Cybersecurity Companies Investors Should Keep Their Eye on

Investing in multiple cybersecurity companies can offer investors an added layer of security. In this clip from "The AI/ML Show" on Motley Fool Live, recorded on Feb. 23, Motley Fool contributors Toby Bordelon and Nicholas Rossolillo talk about the cybersecurity stocks that investors should have on their radar and discuss why a basket approach is an optimal way to protect your portfolio especially in the cyber industry.

Toby Bordelon: What are some companies in the space? Again, you mentioned CrowdStrike (CRWD 0.13%), we're talking more about that, but are there other ones that investors should think about? These are the companies that are providing that service. A cloud-based, cybersecurity solution using artificial intelligence to help build out that for making it a little more responsive.

Nicholas Rossolillo: I first mentioned that I do the basket approach, especially in this industry because I know the industry talks a lot about building in redundancy. You don't just pick one product and then call it good. You want multiple levels of security. In case one fails, you've got backups. But, at the same time, a lot of companies complain about the complexity of having multiple vendors. I really love Fortinet (FTNT -2.17%). They often get mentioned along with Palo Alto Networks (PANW -1.71%) as a legacy company. They develop the hardware that protects datacenters. I mean, the computing unit of the cloud is the datacenter, so that's not legacy at all if you think of it like that. It is like protecting the foundation of the entire cloud, like the massive industry that is becoming the cloud. I like Fortinet. They've been around for a long time. They've got a lot of cool stuff in AI and machine learning. Because they are starting from that base at the datacenter, the core of the cloud, it's a natural fit for them to expand on their services beyond that, and enlarging the network that they can protect for their customers. They've made a push into endpoint security because of companies like CrowdStrike that have made so much hay in recent years because of remote work. Fortinet, I think that's just a super underrated company, and it has been my personal favorite for at least the last couple of years. Then, in talking again about that customization and starting small and then building up to a big customer like the federal government, I thought of Cloudflare (NET -1.05%) because that was their strategy from day one. Actually, they started even smaller. They often will still push out a new product or service to individual users oftentimes for free. Just use this new product for free. There's a premium version, you can pay for it, but we'll let you use the basic thing free of charge. Then, they test it out. They tweak it. Then, they've been going to commercial customers after their individual users test it out. It's the same concept as Mr. Flores was talking about. Start in the commercial world and then build up to a bigger contract. I think Cloudflare has done that brilliantly and actually taken it one step further and tested it out on individual users, then going up-market to bigger businesses. From there, maybe they'll get into government organization contracts. Who knows? But, I think that concept is brilliant, especially in cybersecurity when you need to make sure the product is right and it works because it's mission-critical stuff.