MW These are the hottest cybersecurity stocks in the wake of the Iran conflict
By Philip van Doorn and Tomi Kilgore
Consultants at Palo Alto Networks see a likelihood of attacks on information networks by hackers allied with Iran's government
Many cybersecurity stocks have been lifted this week. Consultants at Palo Alto Networks are concerned about the threat of cyberattacks against government networks by "cyber proxies" allied with Iran's government.
Shares of cybersecurity software companies have been on a roll this week, with investors reacting to the heightened threat of digital warfare as the Iran conflict escalates.
Below is a list of this week's best performers in this industry group that also includes projected sales growth and valuation measures.
Unit 42 - Palo Alto Networks' (PANW) consulting team focused on security threats - published on Monday a threat assessment indicating that there has been "an escalation in cyberattacks" from Iran-affiliated activists outside of the country.
Attacks by state-sponsored actors within Iran are less likely, as the U.S.-Israel attacks have likely hindered the ability of "state-aligned threat actors to coordinate and execute sophisticated cyberattacks in the near-term," the Unit 42 report said. Since the conflict began, internet connectivity in the country has dropped significantly, to just between 1% and 4% of prior connectivity, the report stated.
But the analysts also expect "low-to-medium sophistication disruptions (for example, distributed denial of service and hack and leak campaigns)," by geographically disbursed "operators and affiliated cyber proxies" allied with Iran's government.
And as the U.S. Cybersecurity & Infrastructure Security Agency noted, the Iran government has routinely sponsored attacks on U.S. networks and internet-connected devices, particularly those that have been poorly secured. So investors have good reason to lean in to companies that can help reduce that threat.
Since the Iran conflict started over the weekend, the First Trust Nasdaq Cybersecurity ETF CIBR has climbed 3.1% this week, while the S&P 500 index SPX has lost about 1%. So far this year, the ETF is still down about 10%, amid worries about the threat from artificial intelligence, while the S&P 500 has increased slightly.
The First Trust ETF $(CIBR)$ holds 32 stocks of companies, as it tracks the Nasdaq CTA Cybersecurity Index. This global index includes companies in the technology and industrial sectors that are "primarily involved in the building, implementation and management of security protocols applied to private and public networks, computers and mobile devices in order to provide protection of the integrity of data and network operations," according to Nasdaq.
So here is a list of the 10 holdings of CIBR that were up the most this week through midday trading on Wednesday. The table also includes projected compound annual growth rates (CAGR) for sales from 2025 through 2027. These projections are based on consensus estimates among analysts working for brokerage and research firms polled by LSEG. The projections are based on calendar-year revenue estimates, as adjusted by LSEG for companies whose fiscal years don't match the calendar. In comparison companies in the S&P 500 as a weighted group are expected to show a revenue CAGR of 4.8% over the next two years.
Company Price change from Feb. 27 through midday March 4 2026 price change Two-year projected sales CAGR through 2027 Forward P/E Cloudflare 7.9% -5.7% 28.3% 146.3 Rapid7 7.4% -56.1% -0.8% 4.2 A10 Networks 7.0% 16.4% 10.5% 19.5 Palo Alto Networks 6.9% -13.6% 20.8% 40.3 CrowdStrike Holdings 6.8% -15.3% 22.2% 77.0 Zscaler 6.6% -30.3% 20.4% 34.9 Qualys 6.4% -26.0% 7.5% 12.9 Tenable Holdings 5.7% -13.6% 7.1% 10.3 Fortinet 5.3% 4.8% 11.1% 26.3 Radware 4.6% 0.5% 8.5% 20.9 Source: FactSet
CrowdStrike's stock also got a boost this week after the company reported late Tuesday fiscal fourth-quarter revenue that rose above expectations, and provided an upbeat full-year outlook.
All of these companies are based in the U.S. except for Radware $(RDWR)$, which is based in Israel.
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The table includes forward price/earnings ratios, which are prices divided by consensus earnings-per-share estimates among analysts polled by LSEG. They compare to weighted forward P/E ratios of 21.8 for the S&P 500 and 24.2 for the index's information technology sector and 26.3 for the industrial sector.
Some of the P/E ratios are very high, underscoring how revenue growth has been the driver for many of these stocks over the long term.
-Philip van Doorn -Tomi Kilgore
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(END) Dow Jones Newswires
March 04, 2026 14:37 ET (19:37 GMT)
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