3 Cloud Security Stocks That Are Must-Buys in a Digital World

With the mass migration of organizations from traditional physical storage to large-scale data centers, cloud solutions, and emerging technologies, cybercriminals are seizing new opportunities. However, the cybersecurity industry remains steadfast in its mission to stay ahead of evolving threats, continuously adapting to counter new risks.

Amid this environment, investors could scoop up shares of fundamentally stable cloud security stocks, Okta, Inc. (OKTA), CyberArk Software Ltd. (CYBR), and Check Point Software Technologies Ltd. (CHKP).

As the world becomes increasingly digital, traditional security measures must seamlessly transition into the digital space. With most businesses moving to cloud storage and other online services, cyber threats have surged, with over 30,000 new vulnerabilities disclosed in the past year, a 17% year-over-year increase.

However, cybersecurity companies are rapidly adapting. AI-powered cybersecurity solutions now monitor, analyze, detect, and respond to threats in real-time. By recognizing behavior patterns, automating security processes, and identifying anomalies, these technologies are enhancing data protection.

According to a report by Grand View Research, the global cloud security market is forecasted to reach $75.26 billion by 2030, growing at a CAGR of 13.1%. The figures showcase robust investment opportunities present in the industry.

So, let us dive deep into the fundamentals of three Software – Security stocks, starting with #3.

Stock #3: Okta, Inc. (OKTA)

OKTA is an identity partner that offers products and services used to manage and secure identities, including Single Sign-On, Adaptive Multi-Factor Authentication, API Access Management, Access Gateway, and Okta Device Access.

On January 28, 2025, OKTA announced a multi-year partnership with the McLaren Formula 1 Team, strengthening its position as a leader in digital identity and security. This collaboration allows OKTA to showcase its technology on a global stage by securing and enhancing access to McLaren’s apps and platforms for fans, partners, and employees.

Following the initial deployment, OKTA will further support McLaren Racing by streamlining its digital infrastructure, enhancing security capabilities, driving operational efficiency, and reinforcing OKTA’s expertise in protecting high-performance organizations.

On November 26, 2024, OKTA launched its Customer Identity Cloud, enabling developers and organizations to secure identities in GenAI applications more effectively. By simplifying the adoption of secure identity standards for common GenAI use cases, the solution enhances data protection and compliance.

This expansion strengthens OKTA’s position as a leader in digital identity, broadening its reach in the rapidly growing AI-driven technology space.

For the fiscal 2025 third quarter that ended October 31, 2024, OKTA’s total increased 13.9% year-over-year to $665 million. Its non-GAAP gross profit rose 14.4% from the year-ago value to $541 million.

Additionally, the company’s non-GAAP net income and non-GAAP net income per share increased 53.2% and 52.3% year-over-year to $121 million and $0.67, respectively.

Analysts expect OKTA’s revenue and EPS for the fiscal 2025 fourth quarter that ended in January 2025 to increase 10.6% and 16.9% year-over-year to $669.10 million and $0.74, respectively. Additionally, the company surpassed the consensus revenue and EPS estimates in all four trailing quarters, which is noteworthy.

Shares of OKTA have surged 16.3% over the past six months and 19.1% over the past year to close the last trading session at $97.47.

OKTA’s POWR Ratings reflect its fundamentals. OKTA has an A grade for Growth and a B for Sentiment. The POWR Ratings are calculated by taking into account 118 different factors, with each factor weighted to an optimal degree.

Within the B-rated Software - Security industry, OKTA is ranked #11 out of 20 stocks. To access OKTA’s Value, Quality, Stability, and Momentum ratings, click here.

Stock #2: CyberArk Software Ltd. (CYBR)

Headquartered in Petah Tikva, Israel, CYBR develops, markets, and sells software-based identity security solutions and services. Its offerings include Privileged Access Manager, Vendor Privileged Access Manager, Dynamic Privileged Access, Endpoint Privilege Manager and Secure Desktop.

On February 4, 2025, CYBR announced a new integration with SentinelOne, Inc.'s (S) AI-powered cybersecurity platform, SentinelOne Singularity. The integration aims to protect against privileged access misuse, detect and prevent ransomware, accelerate response and mitigation, and maintain user productivity.

By strengthening its security offerings and expanding its AI-driven solutions, CYBR is reinforcing its market leadership and driving demand for its products, positioning the company for increased revenue growth and customer adoption.

On January 30, 2025, CYBR launched Identity Bridge, an endpoint identity security capability aimed at supporting identity and privilege sprawl reduction on Linux machines.

By strengthening access controls and minimizing security risks, this launch enhances CYBR’s competitive edge, attracting more enterprise customers and creating new revenue opportunities in the growing endpoint security market.

For the fiscal 2024 third quarter that ended September 30, 2024, CYBR’s total revenues increased 25.6% year-over-year to $240.10 million. Its non-GAAP operating income rose 109.5% from the year-ago value to $35.36 million.

Moreover, the company’s non-GAAP net income and non-GAAP net income per share increased 130.2% and 123.8% year-over-year to $45.14 million and $0.94, respectively.

Street expects CYBR’s revenue for the fiscal 2024 fourth quarter (ended in December 2024) to increase 35.1% year-over-year to $301.46 million. The company has also surpassed the consensus revenue and EPS estimates in all four trailing quarters.

Moreover, its revenue for the fiscal 2025 first quarter ending in March is forecasted to rise 35.8% year-over-year to $300.78 million.

Shares of CYBR have surged 57.8% over the past six months and 62.5% over the past nine months to close the last trading session at $382.81.

CYBR’s POWR Ratings reflect its robust prospects. The stock has an overall rating of B, equating to a Buy in our proprietary rating system.

CYBR has an A grade for Growth and a B for Sentiment and Quality. Within the Software – Security industry, CYBR is ranked #10 out of 20 stocks.

In addition to the POWR Rating highlighted above, you can check CYBR’s ratings for Stability, Momentum, and Value here.

Stock #1: Check Point Software Technologies Ltd. (CHKP)

Based in Tel Aviv, Israel, CHKP develops, markets, and supports a range of products and services for IT security. It offers a multilevel security architecture, cloud, network, mobile devices, endpoint information, and IOT solutions. The company also provides Check Point Infinity Architecture, a cyber security architecture.

On February 4, 2025, CHKP announced impressive results for its Infinity Platform in Miercom’s 2025 security benchmark report. The company’s Infinity Platform reached a 99.9% block rate on Zero+1 day malware, a 99.7% phishing prevention rate and 8% block rate on high and critical network intrusion exploits.

These results solidify the company’s advanced portfolio of cyber security solutions and establish itself as a market leader in the industry.

On the same day, CHKP announced new Infinity Platform capabilities aimed at accelerating zero trust, enhancing threat prevention, reducing complexity, and simplifying security operations.

These AI-powered innovations that are actively straightening the Unified Security Management capabilities of the Infinity Platform, could aid in advancing the company’s portfolio and attract more users.

For the fiscal 2024 fourth quarter that ended December 31, 2024, CHKP’s total revenues increased 6.1% year-over-year to $703.70 million. Its non-GAAP operating income amounted to $306.40 million.

Additionally, the company’s non-GAAP net income and non-GAAP EPS grew 1.6% and 5.1% from the prior year's quarter to $303.20 million and $2.70, respectively.

The consensus revenue and EPS estimates of $635.49 million and $2.18 for the fiscal 2025 first-quarter ending in March reflect a year-over-year rise of 6.1% and 7.1%, respectively. Moreover, the company has surpassed the consensus revenue and EPS estimates in three of the four trailing quarters.

The company’s stock has surged 22.3% over the past six months and 39.2% over the past nine months, ending the last trading session at $212.44.

CHKP’s stable fundamentals are mirrored in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.

CHKP has an A grade for Quality. Within the Software – Security industry, it is ranked #6 out of 20 stocks.

Click here to access CHKP’s Stability, Value, Momentum, Growth, and Sentiment ratings.

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CHKP shares rose $0.66 (+0.31%) in premarket trading Friday. Year-to-date, CHKP has gained 13.79%, versus a 3.45% rise in the benchmark S&P 500 index during the same period.

Aritra is a financial journalist dedicated to breaking down complex financial topics into simple, actionable insights. Holding a Master’s degree in Economics, he uses his analytical expertise to help investors uncover unique opportunities for long-term success.

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