Cybersecurity Stocks to Watch: Wedbush's H2 Predictions

Wedbush expects robust cybersecurity growth in H2 with AI adding to tailwinds. The firm's top cybersecurity stocks include Palo Alto Networks, CrowdStrike, Zscaler, CyberArk, Checkpoint, and Varonis Systems. Wedbush sees strong growth potential for these companies due to increasing demand for cybersecurity solutions and the adoption of AI in the industry.

Wedbush Securities has issued a report predicting robust cybersecurity growth in the second half of 2025, with artificial intelligence (AI) playing a significant role in driving demand. The firm has identified Palo Alto Networks (NASDAQ:PANW), CrowdStrike (NASDAQ:CRWD), Zscaler (NASDAQ:ZS), CyberArk (NASDAQ:CYBR), Checkpoint, and Varonis Systems (NASDAQ:VRNS) as top cybersecurity stocks poised to benefit from this trend [1].

Wedbush analysts, led by Daniel Ives, anticipate that cybersecurity spending will remain strong, with many CIOs planning strategic AI paths. The firm expects an accelerated upward trend in spending, driven by AI's increasing integration into critical systems, which can elevate the threat landscape [1]. The analysts also note that while AI is a top priority, many companies are still in the early stages of adopting AI, with module add-ons becoming more prevalent [1].

The report highlights that the broader software and cybersecurity space is entering the "AI Revolution," with the use cases for AI exploding and enterprise consumption expected to rise significantly. Large language models and the true adoption of generative AI are seen as major catalysts for the software sector [1]. Wedbush believes that cybersecurity names are likely to be major beneficiaries of this AI-driven growth, with the potential for significant upside in the coming year [1].

In addition to the growth opportunities, the report suggests that the cybersecurity sector could see an acceleration of mergers and acquisitions, driven by the strategic need for AI deployments. This could create further consolidation and growth opportunities in the sector [1].

The report also mentions Microsoft (NASDAQ:MSFT) as a key player in the AI ecosystem, with accelerating enterprise adoption of AI transforming its cloud trajectory. Wedbush estimates that by fiscal 2028, over 70% of Microsoft's commercial users will be leveraging its AI tools, with these offerings projected to add nearly $25 billion in revenue by fiscal 2026 [2].

Accenture and Microsoft have also announced a collaborative investment to develop advanced cybersecurity solutions powered by generative AI. This partnership aims to help organizations combat sophisticated threats and streamline technology tools [3]. The collaboration focuses on modernizing security operation centers (SOC), automating data and AI security, facilitating security-centric cyber migration, and enhancing identity and access management (IAM) [3].

Daniel Ives, a widely recognized tech expert at Wedbush, sees even more upside ahead for the tech sector, with the AI Revolution tailwinds now accelerating across various segments. He opines that investors are still underestimating the tidal wave of growth on the horizon from enterprise and government spending around AI technology and use cases [4].

In conclusion, Wedbush's report indicates strong growth potential for the cybersecurity sector in the second half of 2025, driven by AI's increasing role and adoption. This presents significant opportunities for investors and financial professionals to consider.

References:
[1] https://seekingalpha.com/news/4467036-robust-cybersecurity-growth-expected-in-h2-with-ai-adding-to-tailwinds---wedbush
[2] https://finance.yahoo.com/news/wedbush-microsoft-second-join-4-200241752.html
[3] https://finance.yahoo.com/news/accenture-microsoft-join-forces-develop-115958094.html
[4] https://www.theglobeandmail.com/investing/markets/stocks/RBRK-N/pressreleases/33264311/the-next-leg-up-is-coming-daniel-ives-suggests-3-tech-stocks-to-buy/