Is Check Point Software Technologies (CHKP) the Top Edge Computing Play for Hedge Funds?

In a market racing toward decentralized, low-latency computing, edge computing stocks have emerged as a battleground for investors. Check Point Software Technologies (NASDAQ: CHKP), a cybersecurity stalwart, is positioned as one of the 12 Best Edge Computing Stocks to Invest In According to Analysts—ranking ninth on the list. But with mixed signals from hedge funds, is CHKP truly the best bet? Let’s dissect its edge computing strategy, financials, and institutional sentiment.

Why Check Point Belongs in the Edge Computing Conversation

Check Point’s edge credentials hinge on its Harmony SASE platform, which integrates SD-WAN, IoT security, and AI-driven threat detection into a single framework. The company’s Quantum Firewall R82, launched in late 2024, exemplifies its edge focus: this AI-powered tool detects Gen-VI malware in real time, prioritizing localized threat prevention.

The $186 million acquisition of Cyberint in Q3 2024 further strengthened its edge capabilities, adding cybercrime tracking and dark web analytics. Meanwhile, partnerships with over 2,000 new partners since 2023 have fueled a 30% rise in partner-driven bookings, underscoring Check Point’s ecosystem reach.

Financial Performance: Steady Gains Amid a Shifting Landscape

Check Point’s Q3 2024 results showed 7% revenue growth to $635 million, with non-GAAP EPS rising 9% to $2.25. Subscription revenue surged 12%, signaling strong adoption of its cloud-centric, edge-optimized solutions. Barclays maintained an "Overweight" rating, forecasting high single-digit Q4 growth and ~5% 2025 revenue expansion.

The global edge computing market is projected to skyrocket from $13.66 billion in 2024 to $181.96 billion by 2032 (CAGR of 38.2%), driven by 5G and IoT adoption. Check Point’s focus on Zero Trust architectures and AI copilot tools positions it to capture this growth.

Hedge Fund Activity: Caution Amid a Bull Run

While Check Point’s fundamentals are robust, hedge funds sent mixed signals in Q1 2025. Key moves included:
- Suncoast Equity Management and MIG Capital adding to their stakes.
- Moore Capital, ARK Investment Management, and Fisher Asset Management exiting entirely, with ARK trimming its position by 25.5%.

Overall, holdings fell by 507,200 shares, marking a "Very Negative" confidence signal. GreensKeeper Asset Management noted Check Point’s 34.49% 52-week gain but prioritized AI stocks for higher short-term returns.

This divergence highlights a broader theme: while Check Point’s edge offerings are solid, investors are tilting toward AI-driven plays like generative AI or cloud-native security tools.

The Elephant in the Room: Competition and Challenges

Check Point faces stiff competition from Palo Alto Networks, Cisco, and VMware, all pushing edge-focused solutions. Analysts also flag Gen-AI-driven cyberattacks as a growing risk—a threat Check Point aims to counter with its GenAI Protect tool.

Moreover, hedge funds’ Q1 2025 sell-offs reflect a sector-wide shift toward higher-growth AI stocks, leaving edge-focused cybersecurity plays in the shadow.

Conclusion: A Strong Foundation, but Not Without Risks

Check Point is undeniably a leader in edge computing, with AI-integrated security, a robust partner network, and a $182 billion edge market in its sights. Its Q3 2024 results and 30% partner-driven growth suggest execution strength.

However, the Q1 2025 hedge fund exodus—driven by a preference for faster-growing AI stocks—adds a cautionary note. Investors should weigh CHKP’s long-term edge dominance against shorter-term institutional sentiment shifts.

For the long-term investor, Check Point’s 9th-place ranking among edge stocks and 38.2% market CAGR make it a compelling hold. But for those chasing quick wins, this may not be the top pick.

In short: Check Point isn’t the best edge computing stock for all investors—but for those betting on secure, decentralized infrastructure, it’s a top-tier choice with ample runway ahead.