Cybersecurity companies are relatively well-insulated from macroeconomic headwinds because even when belt-tightening is needed, companies generally don't choose to shut off their digital defenses to save a few bucks. That makes such companies attractive investments right now as tariffs, trade wars, and geopolitical conflicts rattle the U.S. economy and the markets.
However, it can be tough to differentiate between the likely winners and the likely losers in the sector if you don't understand their underlying technologies. So today, I'll highlight three companies I see as big potential cybersecurity winners, explain how their platforms lock in customers, and talk about why they're still worth investing in today.
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1. Zscaler
Zscaler (ZS -0.62%) deploys "zero trust" systems that treat everyone on a network as a potential threat and require repeated proof to the contrary. But unlike older cybersecurity companies, which often install their services via on-site appliances, Zscaler only provides its tools as cloud-native services -- which are stickier, easier to scale, and can be remotely maintained and updated. It serves over 7,500 customers worldwide and secures more than 500 billion transactions daily.
From its fiscal 2024 (which ended last July) to fiscal 2027, analysts expect Zscaler's revenue to grow at a compound annual rate of 21%, and they anticipate it will turn profitable by 2027. To achieve that growth, it plans to triple its zero trust deployments over the next year and a half, expand its artificial intelligence (AI)-powered ZDX Copilot platform, deeply integrate its platform with bigger cybersecurity leaders like CrowdStrike, and integrate its planned acquisition of Red Canary to bolster its managed threat detection capabilities.
Trading at 18 times this year's sales, Zscaler stock doesn't seem cheap. But according to Fortune Business Insights, the zero trust market could expand at a compound annual rate of 16.7% from 2025 to 2032 -- so Zscaler still has plenty of room to grow.
2. CyberArk
CyberArk (CYBR -0.36%) is the leading player in the privileged access management (PAM) market. Instead of focusing on external threats, PAM shields an organization's network from internal threats such as disgruntled employees and corporate spies. CyberArk serves more than 10,000 customers in 110 countries.
From 2024 to 2027, analysts expect CyberArk's revenue to grow at a compound annual rate of 24%. They also expect it to turn profitable in 2026 and grow its net income more than fivefold by 2027. Some of that growth should be driven by its recent acquisition of the machine identify management company Venafi (which it expects to increase its annual recurring revenue by around $150 million), the expansion of its cloud-based subscriptions, and the diversification of its ecosystem beyond its core PAM platform with new zero trust, cloud security, endpoint privilege, and agentic AI services.
CyberArk is valued today at 15 times this year's sales. However, Persistence Market Research expects the PAM market to expand at a compound annual rate of 21.4% from 2024 to 2033 as more companies act to strengthen their internal defenses -- so it might deserve that high valuation.
3. Cloudflare
Cloudflare (NET 0.87%) accelerates the delivery of digital media for websites and apps by storing cached copies of their content on its edge networks. Its content delivery network (CDN) also shields its clients from bot-based attacks by deploying tools for verifying human users. It now serves up data to end users in 330 metropolitan areas in over 125 countries, and processes an average of 78 million HTTP requests per second. Eventually, the company aims to become the equivalent of a "water filtration" system for the modern internet.
From 2024 to 2027, analysts expect it to narrow its net losses as its revenue grows at a compound annual rate of 27%. Catalysts for the business should include its ongoing deployment of Nvidia's GPUs across its edge network to accelerate AI inference tasks, the growth of its "Workers AI" platform (which serves over 3 million active developers) for writing AI applications directly on its edge network, the expansion of its secure access service edge (SASE) platform Cloudflare One as an alternative to traditional firewalls, and the growth of its Cloudforce One security platform which bundles together a wider range of network security and threat intelligence tools.
Cloudflare's stock certainly isn't a bargain trading at 30 times this year's sales. But it could remain at the top of the global CDN market, which Grand View Research estimates will expand at a compound annual rate of 17.7% from 2024 to 2030. Therefore, the company could keep expanding as higher internet speeds drive more companies to build more media-intensive apps and websites, and increasingly sophisticated bot-based attacks could drive more customers to deploy its bot-blocking security services.
