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Imagine hiring an assistant who works around the clock. While you’re out for lunch, it’s combing through thousands of documents and finishing assignments before your lunch order hits the table.
First, you give it access to company files. It does a good enough job, so then you give it access to customer records. Eventually, when you trust it enough, you give it permission to take actions on your behalf.
Now imagine discovering that it has been opening files outside its assignment and communicating with other assistants at different companies.
Suddenly, the productivity discussion becomes a security discussion.
Who gave it access? What else can it reach? And how quickly can you shut it down?
We could , as Dario suggested, but a slower release schedule doesn’t revoke the access already granted to increasingly capable AI systems.
Companies still need to verify identities, restrict permissions, monitor activity, and stop threats. In my view, those requirements create a durable spending opportunity for cybersecurity businesses, whether frontier development accelerates or becomes more deliberate.
For investors, that offers a way to approach the AI trade without having to predict the date of the next breakthrough.
The industry is already preparing for this. Palo Alto Networks (PANW) completed its CyberArk acquisition in February, adding identity security as a core platform pillar explicitly covering human, machine, and AI-agent identities. Its announcement makes clear how .
But recognizing a growing need is only half the investment decision. The other half is deciding what to pay.
In this week’s episode of , I examine five cybersecurity stocks I like. Each offers different ways to invest in securing AI, from protecting corporate systems to managing automated internet traffic. Their growth prospects and valuations differ, too.
Some already command substantial premiums. One offers a comparatively lower valuation, alongside slower expected growth. And another has the combination of growth potential, valuation, and an emerging stock-price recovery that makes it my favorite entry among the five.
That said, higher interest rates could still pressure expensive stocks. So a strong business needs an investment case that accounts for its price.
Watch the episode below for my breakdown of all five, and which cybersecurity stock I think offers the greatest upside potential over the next 12 months.
Palo Alto Networks (PANW): A Broader Security Platform for the AI Economy
Every AI agent a company deploys creates another identity to manage, another set of permissions to control, and another potential opening for attackers.
Palo Alto Networks is building a business around securing that expanding environment.
Its strategy brings network security, cloud security, and security operations into a comprehensive platform. That gives customers a way to consolidate vendors and gives Palo Alto opportunities to sell more services within existing relationships.
The February acquisition of CyberArk added identity security as a fourth core pillar. That becomes especially valuable when software agents need access to sensitive information and permission to act on a company’s behalf.
Why buy now: I believe heightened concern about AI safety can translate into larger security budgets, strengthening an already attractive growth outlook. Palo Alto has the breadth to capture spending across several categories instead of depending on demand for a single product.
In the episode, I explain , and how that could support faster earnings growth.
Investors already pay a substantial premium for this business. I think its profitability, comprehensive platform, and durable demand justify paying up, provided you’re investing beyond the next quarter.
CrowdStrike (CRWD): Protecting Companies as AI Agents Get More Freedom
CrowdStrike (CRWD) is my clearest investment in the growing need to make AI deployment safer.
The company’s core strategy starts with Falcon endpoint protection, which secures devices connected to a company’s network. From there, CrowdStrike sells additional services covering identity, cloud security, and other vulnerabilities.
That approach gives it an established customer base through which to introduce new protections for autonomous AI agents.
CEO George Kurtz has also made an argument I agree with: One laboratory choosing restraint will not necessarily slow the entire industry. Cybersecurity companies need to help customers operate safely as the technology advances.
Why buy now: CrowdStrike can build on its existing customer relationships as businesses reassess the risks of giving AI systems greater access and autonomy. Its agent-security products address a need that remains relevant regardless of how quickly the next frontier model arrives.
I see . Combined with potential margin expansion, that could support strong earnings growth over several years.
The shares carry a demanding valuation, so execution matters. But rising earnings estimates and improving stock-price momentum reinforce my conviction. For investors with a multiquarter outlook, I think the business warrants that premium.
Cloudflare (NET): Securing the Internet That AI Agents Increasingly Use
AI agents become more useful when they can venture beyond a company’s internal systems to research, interact with websites, and complete transactions.
That also creates more traffic for website operators to identify and control.
Cloudflare (NET) already helps make websites faster and safer. As automated activity expands, its experience managing bots and protecting internet traffic becomes increasingly relevant.
Tools such as AI Crawl Control allow website owners to manage how AI crawlers access their content. Its work in securing agent-driven commerce extends the opportunity into transactions.
Why buy now: I believe the shift toward an internet with more autonomous activity can expand demand for Cloudflare’s services. Customers need to distinguish useful automation from abusive traffic, and enforce their decisions at scale.
Among these five companies, Cloudflare offers one of the strongest growth profiles in my analysis. I also see room for margins to improve as the business expands, potentially allowing earnings to grow faster than revenue.
The valuation is high. This is an investment in sustained growth, and disappointing results could pressure the shares.
Still, the combination of rising earnings estimates, an improving chart, and a growing role in managing AI traffic makes Cloudflare particularly attractive to me.
Fortinet (FTNT): An Established Security Business at a Lower Relative Valuation
Investors looking for cybersecurity exposure without paying the group’s highest valuations should take a closer look at Fortinet (FTNT).
The company already has an extensive base of customers using its firewalls and network-security products. That gives it a practical route for introducing AI capabilities through relationships it has already established.
Its FortiAI tools help security teams assess alerts and respond to incidents. Fortinet is also expanding protection for AI systems themselves, including defenses against prompt injection, data leakage, and other threats.
The acquisition of Virtue AI adds capabilities for testing AI systems and applying safeguards.
Why buy now: Fortinet can sell additional AI-security capabilities into its installed base while trading at a substantially lower forward earnings multiple than several faster-growing peers discussed in the episode.
That lower valuation comes with a trade-off: I expect slower revenue growth than at CrowdStrike or Cloudflare. But Fortinet’s profitability and potential for margin expansion still support an attractive earnings outlook.
I also like the improving technical setup, including the breakout discussed in the episode.
Fortinet is my choice here for investors who prefer steadier expected growth and less exposure to an exceptionally high valuation. A lower multiple does not eliminate risk, but it changes what the business must deliver to justify its price.
Zscaler (ZS): My Favorite Entry Among the Five
Zscaler’s (ZS) central principle fits the emerging AI economy: Access should be verified rather than granted automatically.
Its Zero Trust Exchange applies that approach to users, devices, and workloads. As companies deploy autonomous agents, the same question becomes more urgent: What should this system be allowed to access, and under what conditions?
Zscaler is extending its platform to address those needs. Its acquisition of Symmetry Systems adds technology for understanding how people, applications, AI agents, and data interact.
Why buy now: Zscaler offers what I consider the most attractive combination of growth potential and valuation in this group.
In the analysis presented in the episode, its forward earnings multiple sits , while several peers trade at premiums. I believe new AI-security products could help revenue growth exceed the expectations embedded in that valuation.
The stock’s recovery also appears earlier than those of several peers. Improving price action and rising earnings estimates give me reasons to take that recovery seriously.
The opportunity depends on execution: New products must win business, and faster growth must materialize.
But if those developments unfold as I expect, Zscaler has room to benefit from both earnings growth and a stronger investor assessment of the business. It is my favorite entry of the five, and the one I believe offers the most upside potential over the next 12 months.
The Next AI Opportunity Is Already Getting to Work
The five cybersecurity companies we’ve covered address a problem businesses have to solve before giving AI more responsibility: making sure those systems can operate securely.
That’s one reason I remain bullish. Even if frontier development becomes more deliberate, companies still have plenty of work to do turning today’s AI into products customers can trust, and will pay to use.
Some of the most interesting businesses pursuing that opportunity are still private. However, I recently recommended a young robotics company doing exactly that.
It started in food service, where its robots are already working in commercial locations. I visited one myself and watched a robot take an order, prepare it, and deliver the finished product.
But what interested me most was the technology behind those movements.
The company is developing a system that teaches robots physical skills through human demonstrations. If that approach succeeds at scale, its opportunity could extend well beyond food service into warehouses, factories, and other workplaces.
That’s why I’ve called it the “” It’s my No. 1 private robotics opportunity at this turning point in the AI boom. In my free , I explain the business, the risks, and why I decided to recommend it.
However, the offering closes to new investors at midnight Monday, Sept. 21.
Watch the free presentation now to get the company’s name, understand what you’re buying, and review the offering before that window closes.
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