In recent times, many investors have steered clear of cybersecurity stocks as they evaluate the potential impact of artificial intelligence (AI) on these companies. While assessing corporate performance and market conditions is prudent, the recent significant declines in cybersecurity stocks have led some investors to react more with panic than careful analysis.
This situation has created buying opportunities for long-term investors. Here are two cybersecurity stocks that are worth considering now, especially given the eagerness some investors showed to sell.
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1. AI is Boosting Palo Alto’s Security Business
Palo Alto Networks (PANW +1.21%) is a prominent player in cybersecurity that has made significant strides to strengthen its market presence, including a $25 billion acquisition of CyberArk for its leading identity and access management features.
CEO Nikesh Arora recently indicated that Palo Alto is harnessing AI for growth. He noted that the company is experiencing “sustained strength in platformization, a trend accelerated by AI,” as clients aim to modernize their cybersecurity infrastructure. With the rise of AI-driven security solutions, Palo Alto is expected to capitalize on a long-term growth trajectory.
2. Microsoft: The Quiet Leader in Cybersecurity
Microsoft (MSFT 0.43%) does not explicitly outline its cybersecurity revenue, but projections for 2025 suggest it could generate around $37 billion, with possibilities of reaching $50 billion annually by 2030. It recently reported having 1.6 million global security customers.
Microsoft is uniquely positioned to tackle the complexities of emerging AI threats, as its security business is intimately linked with its cloud computing division. With Azure holding 21% of the market share, Microsoft is poised to attract more cybersecurity clients as the AI cloud market is projected to grow significantly by 2030.
