3 Cloud Security Stocks Poised for Explosive Growth

Cloud computing has matured from an upcoming new technology to a mass-scale product that is being used by every major enterprise. However, with such a big switch to store and use data in the cloud, threats have also been on the rise.

Amid this backdrop, investors could scoop up shares of fundamentally stable cloud security stocks, CyberArk Software Ltd. (CYBR), Tenable Holdings, Inc. (TENB), and Trend Micro Incorporated (TMICY). These stocks are well-positioned for explosive growth in the evolving cloud security industry.

The avenues of cloud computing are too good for companies to give up on them. It offers robust scalability, efficiency and most importantly, cost-effectiveness. As a result of this, around 96% of companies worldwide are using the public cloud, with 84% using a private cloud setup.

However, attackers have not been sitting kindly. As technology evolves, so does the nature and severity of these threats. With 82% of breaches involving cloud-stored data cyber threats are evolving faster than ever.

Organizations are quick to keep up with these evolving attack trends. AI-powered cybersecurity solutions are actively monitoring, analyzing, detecting, and responding to threats in real-time. By recognizing behavior patterns, automating security processes, and identifying anomalies, these technologies are enhancing data protection.

According to a study 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%. These growth figures showcase ample investment opportunities present in the industry.

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

Stock #3: 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 13, CYBR announced the acquisition of Zilla Security, a leader in modern Identity Governance and Administration solutions. The acquisition expands CYBR’s Identity Security Platform with scalable automation, enabling accelerated identity compliance and provisioning across digital environments and maximizing security and operational efficiency.

On the same day, CYBR announced a collaboration with Builder.ai to secure identities across its multi-cloud environment. Aimed at protecting and automating workforce and developer user access to all apps with intelligent privilege controls, the collaboration would enhance the company’s position in the highly contested cybersecurity sector.

For the fiscal 2024 fourth quarter that ended December 31, 2024, CYBR’s total revenues increased 61.8% year-over-year to $243.05 million. Its non-GAAP operating income rose 69% from the year-ago value to $58.74 million. Moreover, the company’s non-GAAP net income increased 6.3% year-over-year to $40.44 million. Its non-GAAP net income per share amounted to $0.80.

Analysts expect CYBR's revenue and EPS for the fiscal 2025 first quarter ending in March to increase 37.6% and 4.7% year-over-year to $304.86 million and $0.79, respectively. The company has also surpassed the consensus revenue and EPS estimates in all four trailing quarters, which is impressive.

Shares of CYBR have surged 52.9% over the past six months and 77.4% over the past nine months to close the last trading session at $414.31.

CYBR’s POWR Ratings mirror its sound fundamentals. The stock has an overall rating of B, translating to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

CYBR has an A grade for Growth and a B for Sentiment and Quality. Within the B-rated Software – Security industry, CYBR is ranked #9 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 #2: Tenable Holdings, Inc. (TENB)

TENB provides cyber exposure solutions. The company offers Tenable Vulnerability Management, Tenable Cloud Security, Tenable Identity Exposure, Tenable Web App Scanning, Tenable Lumin Exposure View, Tenable Attack Surface Management, and other cybersecurity platforms.

On February 7, 2025, TENB acquired Vulcan Cyber Ltd., a leading innovator in exposure management. The acquisition expands the company’s Exposure Management platform to deliver comprehensive visibility, prioritization, and remediation across the entire attack surface and accelerates its exposure management vision.

For the fiscal 2024 fourth quarter that ended December 31, 2024, TENB’s revenue increased 10.5% year-over-year to $235.73 million. Its non-GAAP income from operations rose 64.6% from the year-ago value to $59.35 million.

Moreover, the company’s non-GAAP net income and non-GAAP net income per share increased 68% and 64% year-over-year to $50.66 million and $0.41, respectively.

Street expects TENB’s revenue and EPS for the fiscal 2025 first quarter ending in March, to increase 8.3% and 16.3% year-over-year to $233.82 million and $0.29, respectively. Plus, the company has surpassed consensus revenue and EPS estimates in three of the four trailing quarters.

Shares of TENB surged 2.7% over the past month to close the last trading session at $39.52.

TENB’s robust fundamentals are mirrored in its POWR Ratings. The stock has an overall rating of A, translating to a Strong Buy in our proprietary rating system.

TENB has an A grade for Growth and a B for Quality. Within the Software - Security it is ranked #4 out of 20 stocks.

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

Stock #1: Trend Micro Incorporated (TMICY)

Headquartered in Tokyo, Japan, TMICY develops and sells security-related software for computers and related services. It provides its Vision One platform, attack surface management, extended detection and response (XDR), cloud security, endpoint security, network security, email security, and more.

On January 7, 2025, TMICY announced a collaboration with Intel Corporation (INTC) to aid joint enterprise customers’ security of critical systems against stealthy threats, including fileless malware and advanced ransomware. The integrated solution provides enhanced detection of encryption behavior and makes sure appropriate action is taken to protect critical systems.

On December 11, 2024, TMICY announced its exceptional scores in the latest round of the MITRE ATT&CK® Evaluations. The company achieved a 100% coverage rate in its evaluations. The score solidifies the company's advanced portfolio of cybersecurity solutions and establishes itself as a market leader in the industry.

For the fiscal 2024 third quarter that ended September 30, 2024, TMICY’s net sales increased 10.3% year-over-year to ¥202.66 billion ($1.32 billion). Its operating income rose 32.5% from the year-ago value to ¥39.24 billion ($255.32 million).

Moreover, net income attributable to owners of the parent and net income per share grew 106.3% and 111.6% from the prior year’s quarter to ¥26.42 billion ($171.90 million) and ¥197.38, respectively.

The consensus revenue estimate of $452.62 million for the fiscal 2024 fourth quarter that ended in December 2024 reflects a year-over-year rise of 4.5%. Its revenue for the fiscal 2025 first quarter ending in March is expected to increase 4.6% year-over-year to $443.11.

TMICY’s stock has surged 35.5% over the past three months and 46.7% over the past nine months, closing the last trading session at $70.05.

TMICY’s strong fundamentals are mirrored in its POWR Ratings. The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system.

TMICY has an A grade for Stability and a B for Quality and Growth. Within the same industry, TMICY is ranked #3 out of 20 stocks.

Click here to access TMICY’s Value, Momentum, and Sentiment ratings.

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CYBR shares were unchanged in premarket trading Friday. Year-to-date, CYBR has gained 24.36%, versus a 4.04% 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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