Cybersecurity stocks have surged in 2025, fueled by rising global hacking incidents and enthusiasm for AI-driven protection tools. Firms like Zscaler, Cloudflare, and CrowdStrike have gained between 50% and 77% this year, far outpacing broader software benchmarks such as the iShares Expanded Tech-Software ETF. 

The sector’s strength is being reinforced by record corporate spending, highlighted by Alphabet’s $32 billion acquisition of Wiz and growing demand for cloud-based security solutions. 

Despite heightened competition from tech giants like Microsoft and Google, cybersecurity remains a top enterprise priority, with identity and cloud security expected to drive double-digit growth for years. Investors see continued consolidation and platform integration as key to sustaining momentum across the sector.

Finsum: Both attackers and defenders are increasingly using generative AI, creating new markets for firms specializing in identity and AI security like CyberArk and Okta.