Cybersecurity Investment Surge Amid AI-Driven Attacks: 73% of Businesses Hit

According to a Clutch survey, 73% of businesses have experienced a cyber attack, with 75% of those occurring within the past year. Companies plan to invest in cybersecurity to combat AI-powered threats, with 83% of businesses planning to invest in the next 12 months. Small businesses are at a higher risk of cyber attacks, and investing in prevention is crucial for survival.

The landscape of cybersecurity is undergoing a significant transformation, driven by the increasing prevalence of AI-powered threats and the rising number of cyber attacks. According to a Clutch survey, 73% of businesses have experienced a cyber attack, with 75% of those occurring within the past year [1]. This alarming trend has led to a surge in investment plans, with 83% of businesses planning to allocate resources to cybersecurity within the next 12 months [1].

The heightened risk of cyber attacks, particularly for small businesses, underscores the critical need for robust cybersecurity measures. Small businesses are often more vulnerable due to their limited resources and less sophisticated defenses. Investing in prevention is not just a strategic move but a necessity for their survival and continued operation.

The midterm elections in 2026 will likely bring cybersecurity to the forefront of political and corporate agendas. The Cybersecurity and Infrastructure Security Agency (CISA) and the FBI have prioritized securing election infrastructure, with a $3 billion budget allocated for 2025 [2]. This focus on cybersecurity is expected to translate into increased spending both in the government and commercial sectors, providing a long runway for continued gains in cybersecurity stocks.

Three key cybersecurity stocks are expected to perform well in the coming years:

1. Okta (NASDAQ: OKTA): Okta is a recognized leader in identity and access management (IAM). Its Zero Trust model focuses on granting the right level of access to the right people, for the right resources, and in the right context. The company has reported strong growth in its public sector vertical, with two of its top three deals in this sector during the first quarter of fiscal year 2026 [2].

2. Palo Alto Networks (NASDAQ: PANW): Palo Alto Networks is a leading provider of cybersecurity solutions. The company has shifted to a platformization strategy that simplifies cybersecurity for government buyers, reducing complexity and improving compliance with zero-trust mandates. The U.S. government is a strong vertical for the company, with multiyear federal zero-trust contracts and growing international demand driving durable growth [2].

3. Fortinet (NASDAQ: FTNT): Fortinet is known for its cost-effective firewalls and hardware. The company serves schools, municipalities, and mid-sized businesses with reliable, lower-cost security solutions. While FTNT stock has been down due to concerns about a subdued refresh cycle, management remains optimistic about the company's long-term prospects [2].

Investors should closely monitor these companies and the broader cybersecurity sector as the midterm elections approach. The increased focus on cybersecurity, driven by both government and commercial interests, presents a compelling investment case. However, it is essential to stay informed about regulatory shifts and the evolving threat landscape to make informed investment decisions.

References:
[1] https://www.ainvest.com/news/gilead-sciences-yeztugo-paradigm-shift-hiv-prevention-investment-potential-2508/
[2] https://www.nasdaq.com/articles/3-cybersecurity-stocks-watch-ahead-2026-midterms