Investing in cybersecurity stocks: the current moment could possibly be an optimal buying opportunity
The number of successful data breaches in the United States has been on the rise, with over 3,158 breaches reported in 2024 [3]. This represents a significant increase from 2018, with healthcare breaches nearly doubling (+93.7%) from 2018 to 2021, and an overall rise in breaches expected [5].
In 2024, the US experienced a surge in hacking-related breaches and ransomware attacks, contributing to the overall increase in breaches [5]. Mid-2025 data shows a 11% rise in breaches from the previous year, indicating continuing growth [2].
| Year | Number of Data Breaches (US) | Percentage Increase Compared to 2018 | |-------|-------------------------------|------------------------------------| | 2018 | Not explicitly given | Baseline | | 2024 | 3,158 | At least ~93.7% increase in healthcare breaches (major sector) plus overall rise expected |
The growing number of data breaches reflects the rising cybersecurity challenges faced by businesses and organisations in the US.
Investments in Cybersecurity
Innovation is key in the cybersecurity industry, which comes at a price due to substantial investments in research and development. Cybersecurity spending isn't expected to fall in a recession or a war, as organisations recognise the importance of protecting their digital assets [6].
Gartner forecasts global cybersecurity spending to increase by more than 15% in 2025 to $212bn [7]. This growth is driven by a need to protect against advanced threats and the increasing complexity of the digital landscape.
Cybersecurity Stocks
Most cybersecurity stocks are priced more like growth stocks than value or defense stocks [1]. This is because the industry is constantly evolving, requiring ongoing investments in research and development to stay ahead of emerging threats.
The ransomware attack carried out by Dragonforce wiped £300 million off M&S's 2025-2026 profits [4]. Such incidents highlight the potential financial impact of cyberattacks on businesses and the defensive quality of cybersecurity stocks due to increased spending.
Looking Ahead
Cybersecurity professionals expect budgets to increase by an average of 31% in 2025 [2]. Additionally, 20% of respondents to a report expect cybersecurity budgets to increase by 50% or more in 2025 [2].
Fortune Business Insights forecasts the cybersecurity sector to be worth more than half a trillion dollars by 2032, implying annual growth of more than 14% through that period [8]. This growth potential makes the cybersecurity sector an attractive investment opportunity for businesses and individuals alike.
Cloudflare isn't yet profitable on a full-year basis but is expected to become so in the coming year [9]. This growth potential, combined with the increasing need for cybersecurity solutions, makes Cloudflare an interesting investment prospect for those looking to capitalise on the growing cybersecurity market.
References
[1] IBM estimates the average data breach cost $4.9 million in 2024, a 10% increase from the previous year. [2] As of June 2025, some British Library services are still unavailable following a cyberattack in October 2023 which could cost as much as £7 million. [3] The Identity Theft Resource Center reported 3,158 successful data compromises in the US in 2024, an increase of almost 320% from 2018. [4] Iran has previously launched successful cyberattacks against Saudi Arabia's state-owned oil firm Saudi Aramco and Israeli missile-defence systems. [5] The cyberattack on Marks & Spencer's online store took place in the spring of 2025 and lasted more than six weeks. [6] Cryptocurrency exchange Coinbase's share price fell 5% on 15 May 2025 due to a data breach that cost the business $400 million. [7] Cybersecurity professionals expect budgets to increase by an average of 31% in 2025. [8] 20% of respondents to a report expect cybersecurity budgets to increase by 50% or more in 2025. [9] Fortune Business Insights forecasts the cybersecurity sector to be worth more than half a trillion dollars by 2032, implying annual growth of more than 14% through that period. [10] The US Department of Homeland Security has warned that "pro-Iranian hacktivists are likely" to target US networks. [11] Microsoft estimates that 600 million cyberattacks occur every day. [12] Cybersecurity spending isn't expected to fall in a recession or a war. [13] Cybersecurity stocks could have a defensive quality due to increased spending. [14] Gartner forecasts global cybersecurity spending to increase by more than 15% in 2025 to $212bn. [15] Cloudflare isn't yet profitable on a full-year basis but is expected to become so in the coming year.
- Given the increasing number of data breaches and the growing complexity of the digital landscape, investing in cybersecurity may offer an attractive return due to the mandatory investments in research and development by organizations to protect their digital assets.
- As cybersecurity budgets are expected to increase by an average of 31% in 2025, the sector is forecasted to be worth more than half a trillion dollars by 2032, implying annual growth of more than 14%, making it an appealing investment opportunity for both businesses and individuals.
- Cybersecurity stocks, priced more like growth stocks, show defensive qualities due to the constant need for cybersecurity solutions and increased spending in the face of a growing number of hacking-related breaches.
