3 Cybersecurity Stocks You Can Buyand Holdforthe Next Decade The Motley Fool

Published in Business and Finance on Friday, August 8th 2025 at 15:10 GMT by The Motley Fool
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Three Cybersecurity Stocks to Buy and Hold for the Next Decade

In an era where digital threats are escalating at an unprecedented pace, the cybersecurity industry stands as a critical pillar of modern infrastructure. With cyberattacks becoming more sophisticated and frequent, businesses and governments worldwide are ramping up investments in protective technologies. This surge in demand positions cybersecurity as one of the most promising sectors for long-term investors. A recent analysis highlights three standout companies in this space that are not only leaders in their field but also poised for substantial growth over the next decade. These stocks—CrowdStrike Holdings (CRWD), Palo Alto Networks (PANW), and Zscaler (ZS)—offer compelling cases for buy-and-hold strategies, driven by innovation, market expansion, and robust financial fundamentals.

Starting with CrowdStrike Holdings, this company has emerged as a frontrunner in endpoint security, leveraging its cloud-native Falcon platform to deliver real-time threat detection and response. Founded in 2011, CrowdStrike has revolutionized the way organizations combat cyber threats by shifting from traditional antivirus software to AI-driven, proactive defenses. The platform's modular design allows customers to add functionalities like threat hunting, identity protection, and cloud security as needed, fostering high customer retention and upsell opportunities. In recent years, CrowdStrike has reported impressive revenue growth, with annual recurring revenue surpassing $3 billion, reflecting a compound annual growth rate (CAGR) of over 50% in the past few years. This growth is fueled by the increasing adoption of remote work and cloud computing, which expand the attack surface for cybercriminals. Moreover, CrowdStrike's partnerships with major tech giants like Amazon Web Services and Microsoft enhance its ecosystem integration, making it indispensable for enterprises. Despite occasional market volatility—such as setbacks from global IT outages linked to software updates—the company's long-term outlook remains strong. Analysts project that the global endpoint security market could reach $20 billion by 2030, and CrowdStrike's leadership position, with a market share exceeding 15%, suggests it could capture a significant portion of this expansion. For investors, the stock's premium valuation is justified by its recurring revenue model, which provides stability and predictability. Holding CrowdStrike for the next decade could yield substantial returns as cybersecurity becomes non-negotiable for businesses of all sizes.

Next up is Palo Alto Networks, a veteran in the cybersecurity arena known for its comprehensive suite of products that span network security, cloud security, and secure access service edge (SASE) solutions. Unlike competitors focused on niche areas, Palo Alto offers an integrated platform that addresses the full spectrum of threats, from firewalls to advanced threat prevention. This holistic approach has enabled the company to build a loyal customer base, including Fortune 500 companies and government agencies. Financially, Palo Alto has demonstrated resilience and growth, with fiscal year revenues climbing to over $7 billion, driven by a shift toward subscription-based services that now account for more than 80% of its total revenue. This transition not only boosts margins but also ensures steady cash flow, making it attractive for long-term holding. The company's strategic acquisitions, such as the purchase of cybersecurity firms specializing in AI and automation, have bolstered its innovation pipeline. For instance, its Cortex XDR platform uses machine learning to detect anomalies in real-time, reducing response times dramatically. Looking ahead, the rise of zero-trust architectures—in which no entity is trusted by default—is a major tailwind for Palo Alto, as organizations worldwide adopt this model to counter insider threats and data breaches. Market research indicates the global cybersecurity market could grow to $500 billion by 2030, with network security comprising a hefty chunk. Palo Alto's strong balance sheet, minimal debt, and consistent profitability position it well to navigate economic downturns. While the stock has faced pressure from macroeconomic factors like interest rate hikes, its defensive nature in a digitally dependent world makes it a solid pick for patient investors aiming for compounded growth over the decade.

Rounding out the trio is Zscaler, a pioneer in cloud-based security that emphasizes zero-trust access to protect users, devices, and applications. Zscaler's Zero Trust Exchange platform operates entirely in the cloud, eliminating the need for on-premises hardware and providing scalable security for distributed workforces. This model has gained traction amid the hybrid work boom post-pandemic, where traditional perimeter-based defenses fall short. The company's revenue has skyrocketed, with annual figures approaching $2 billion and a CAGR of around 40%, underscoring its rapid market penetration. Zscaler's strength lies in its ability to secure internet traffic directly, inspecting every connection without slowing down performance—a key differentiator in an age of high-speed digital operations. It serves over 5,000 customers, including major enterprises in finance, healthcare, and technology, which contribute to high net retention rates often exceeding 120%. This metric indicates that existing customers are not only staying but also spending more over time. Innovations like Zscaler's integration of AI for threat prediction and its expansion into data protection services further solidify its moat. The shift toward cloud-native security is irreversible, with projections estimating the SASE market to hit $15 billion by 2028. Zscaler's pure-play focus on this niche, combined with its debt-free balance sheet and positive free cash flow, makes it resilient to short-term fluctuations. However, investors should note the competitive landscape, where giants like Cisco and Microsoft are encroaching, though Zscaler's agility as a smaller, focused player gives it an edge in innovation speed.

Collectively, these three stocks represent diversified exposure within cybersecurity: CrowdStrike for endpoint and threat intelligence, Palo Alto for broad-spectrum protection, and Zscaler for cloud-centric security. The sector's growth is underpinned by relentless cyber threats—ransomware attacks alone cost businesses trillions annually—and regulatory pressures like GDPR and emerging AI governance laws that mandate stronger defenses. While risks such as economic recessions could temper spending, the essential nature of cybersecurity ensures demand persistence. Valuations may seem elevated, with price-to-sales ratios above industry averages, but this reflects high growth potential rather than overvaluation. For long-term investors, a buy-and-hold approach allows compounding through reinvested dividends (where applicable) and capital appreciation. Diversifying across these stocks mitigates company-specific risks while capitalizing on the sector's upward trajectory. As digital transformation accelerates, incorporating AI, IoT, and 5G, the need for robust cybersecurity will only intensify, making these investments timely and enduring.

In summary, CrowdStrike, Palo Alto Networks, and Zscaler are not just stocks; they are bets on the future of a secure digital world. With strong fundamentals, innovative edges, and vast market opportunities, they embody the qualities of holdings that could deliver outsized returns over the next ten years, rewarding those who invest with vision and patience. (Word count: 1,048)

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3 Cybersecurity Stocks You Can Buyand Holdforthe Next Decade The Motley Fool

Three Cybersecurity Stocks to Buy and Hold for the Next Decade