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AI-based cyberattacks increased by 72% in 2025.
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Palo Alto has a very profitable security business and is expanding its presence with the purchase of Cyberark.
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Microsoft is the largest cybersecurity company by revenue.
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10 stocks we like better than Palo Alto Networks ›
Security threats are constantly increasing and becoming more sophisticated, thanks to bad actors using artificial intelligence (AI). AI-based cyberattacks are estimated to increase by approximately 72% in 2025 and that has led to a rapid increase in the number of companies using AI to combat threats, with around two-thirds doing so now.
As the complexities of security increase, cybersecurity companies are more important than ever, driving what will become a $377 billion market by 2028, according to IDC. As companies grow to meet growing threats, investors have the potential to profit from companies leading the pack. here’s why Palo Alto Networks (NASDAQ: PANW) and microsoft (NASDAQ:MSFT) are two of the best cybersecurity stocks to buy right now.
Palo Alto recently took a major step to expand its security leadership by purchasing Cyberark Software for 25 billion dollars. The move helps the company, which was already a leader in cybersecurity, expand its presence in identity and access control. The move, while costly, means Palo Alto can offer a comprehensive cybersecurity solution to its clients once the deal closes in the coming months.
But it’s worth mentioning that Palo Alto would already be a top cybersecurity company even without the purchase. In the fiscal first quarter (ended Oct. 31), the company’s sales rose 16% to $2.5 billion, and its non-GAAP (adjusted) net income rose 19% to $0.93 per share.
Palo Alto’s business is highly profitable, with management reporting another quarter of a roughly 30% operating margin and on track for an adjusted free cash flow margin of 40% or higher by fiscal 2028. With the company’s profitability already high and Palo Alto close to closing its deal with Cyberark to expand its security services, shareholders have a lot to look forward to.
Microsoft is best known for its Azure cloud computing business, its growing influence in artificial intelligence with Copilot, and its Microsoft 365 software offerings. This is important to note because the AI cloud market is estimated to reach $2 trillion globally by 2030.
But the company is also a major player in the cybersecurity space, with 1.5 million cybersecurity customers worldwide. Microsoft has an Azure Security service that it offers to its cloud customers, allowing the company to benefit from both hosting customers’ cloud networks and their need to protect them.