In terms of cybersecurity, I do not know a lot about the way it works from an experiential perspective. So, I suppose one may say I am an outsider. However even an outsider like me understands that companies should put money into cybersecurity in 2025. And I can admire that the necessity for cybersecurity will solely get greater within the coming years.
Analysis agency Gartner predicts that spending for cybersecurity will enhance by 15% in 2025 alone, which is large when a complete market. Gartner additional predicts that the cybersecurity menace will more and more come from generative synthetic intelligence (AI) functions, highlighting how the menace evolves over time. Cybersecurity corporations, consequently, should be fast-changing as effectively.
In terms of the way forward for cybersecurity, I consider that CrowdStrike (CRWD 2.82%), Rubrik (RBRK 1.45%), and Palo Alto Networks (PANW 0.43%) are three cybersecurity shares that traders ought to take into account right here in Might. This is why.
Picture supply: Getty Pictures.
1. CrowdStrike: The highest canine
In terms of cloud-based cybersecurity, CrowdStrike is routinely acknowledged as a prime participant within the house. The corporate gives a subscription platform for its merchandise, offering it with recurring income. It accomplished its fiscal 2025 on Jan. 31. And it ended the yr with annualized recurring income (ARR) of $4.2 billion, which was up 23% from the top of fiscal 2024.
CrowdStrike’s Falcon platform is not a single cybersecurity product however consists of 29 separate software program modules that prospects can use to satisfy their wants. The corporate is at present modifying its enterprise mannequin with this. Earlier than, prospects would choose what they wished and pay the subscription worth. Now, prospects can conform to a sure stage of spending and apply it to the module they need.
It is known as Falcon Flex, and the hope is that it will decrease the bar on the subject of experimentation with CrowdStrike’s modules. As prospects attempt new modules for the primary time, the hope is that they will see the worth and use them recurrently. In different phrases, CrowdStrike plans to spice up development by making it simpler for present prospects to undertake extra software program modules, which feels like a good suggestion to me.
As of the top of its fiscal 2025, solely 21% of CrowdStrike’s prospects used eight or extra of its software program modules. Getting its prospects to make use of extra modules is sort of important for its long-term development. The latest launch of Falcon Flex may assist it get there, and it is one motive I like CrowdStrike inventory at this time.
2. Rubrik: The area of interest up-and-comer
Many traders learn about CrowdStrike, however far fewer have heard about Rubrik. That is comprehensible. It solely went public about 13 months in the past, so it is a new firm for many traders. Furthermore, with $887 million in trailing-12-month income, it is significantly smaller than different publicly traded cybersecurity corporations.
Whereas CrowdStrike tries to stop assaults, Rubrik offers prospects a safe option to put together for an assault beforehand and get again to regular after it occurs. The fact is that even when cybersecurity gamers cease most assaults, they do not cease all of them. And the chance of 1 getting by way of may solely enhance with advances in AI.
The benefit of Rubrik’s deal with this facet of the market is that it is not a direct competitor with CrowdStrike or others — in truth, it companions with CrowdStrike. This offers the up-and-coming firm its personal little nook of the market, and it is rising quick. Like CrowdStrike, Rubrik’s fiscal 2025 ended on Jan. 31. It ended fiscal 2025 with an ARR of simply over $1 billion, which was up a powerful 39%.
Traders ought to take into account Rubrik inventory now, not solely as a result of it is fast-growing. The corporate additionally simply began producing constructive free money circulate. This profitability metric means that administration can scale its enterprise whereas sustaining operational excellence. This mix may quickly begin elevating the eye it receives from the funding neighborhood.
3. Palo Alto Networks: The relentless consolidator
Rubrik is a distinct segment participant, however even CrowdStrike could possibly be thought-about area of interest in comparison with how broad Palo Alto Networks is with its imaginative and prescient. It has each {hardware} and software program options. Its software program merchandise can be utilized on the cloud or on-premises. It is a big portfolio of merchandise which were each constructed and bought over a few years, which makes it among the finest cybersecurity shares for traders inquisitive about masking all of the bases.
Certainly, Palo Alto Networks is at all times keen to amass one other enterprise — it already acquired one in 2025 by shopping for Defend AI for $700 million. Whereas there are dangers to being an organization that makes lots of acquisitions, the corporate has traditionally performed it effectively, and it’s paying off with development. For instance, it simply accomplished its fiscal third quarter of 2025, displaying good development in its newer merchandise.
Particularly, Palo Alto Networks grew its ARR for Subsequent-Era Safety by 34% yr over yr to over $5 billion. And demand for its merchandise general is promising. In Q3, its remaining efficiency obligations (its future income below contract) grew by 19% to a whopping $13.5 billion. Briefly, the outlook for this firm is as sturdy as ever, making Palo Alto Networks one other cybersecurity inventory to contemplate right here in Might.
In closing, the topic of valuation for these corporations can also be vital, however that is a totally totally different topic from the issues that I’ve mentioned right here. However permit me to say that the valuation for Rubrik inventory is way decrease than that for CrowdStrike inventory, and it is akin to the valuation for Palo Alto Networks. However I consider that Rubrik, being a smaller firm, has an opportunity for a greater development fee from right here.
Rubrik might be the riskiest of those three shares, given its measurement and newcomer standing. However for traders prepared to take a shot with a less-proven participant, Rubrik could be the most effective worth for long-term traders.
