Rapid advances in artificial intelligence are widening corporate attack surfaces, turning enterprise security into an essential operating expense rather than a discretionary technology purchase.
While broader software valuations have faced significant pressure this year, cybersecurity stocks have emerged as a rare pocket of premium multiples tied to mission-critical demand.
Ritholtz chief executive Josh Brown contends the current expansion cycle leaves substantial upside for select industry leaders.
His analysis identifies CrowdStrike (CRWD), Palo Alto Networks (PANW), and Fortinet (FTNT) as primary vehicles to capture this ongoing re-rating.
These three holdings present distinct technical entries backed by enterprise platform consolidation and accelerating balance-sheet metrics.
CrowdStrike (CRWD)
CrowdStrike stock has more than doubled year-to-date – overcoming a 25% February drop tied to AI-disruption fear.
The cybersecurity firm completed a 4-for-1 split on July 1, then gained 14% on September 14 amid a sector-wide rotation. At $250, it is trading above both its 50-day and 200-day moving averages (MAs).
Plus, a relative strength index (RSI) in the early 60s reflects positive momentum – with immediate support around the $220 level.
CRWD’s latest quarterly results underscore momentum: revenue rose 26% to $1.47 billion, net-new ARR reached a record $333 million (+51% YoY), and Falcon Flex ARR jumped 101% to $2.29 billion.
And full-year ARR guidance rose to $1.35 billion alongside a 30%+ free cash flow margin.
Backed by Nvidia-partnered SafeMind and a $20 billion fiscal 2035 ARR target, Brown sees “long-term” strength despite elevated valuation risk.
Palo Alto Networks (PANW)
Palo Alto Networks stock is consolidating following a rally from $184 in May to just under $400 by late summer. At $374, it’s trading in a short-term downtrend of lower highs.
Its 200-day moving average at $241 sits too far below to serve as a tactical marker – while an RSI of 53 indicates neutral drift. But buyers have repeatedly defended support between $320 and $330.
Fundamentally, PANW’s platformization strategy continues to drive enterprise deal flow as large buyers consolidate security vendor stacks.
According to Josh Brown, the pullbacks in Palo Alto Networks Inc. are worth buying for long-term holders, though he warns that weaker technical chart calls for discipline until overhead resistance clears near $400.
In its latest reported quarter, the cybersecurity company came in handily above Street estimates – and is currently rated Overweight among Wall Street firms.
Fortinet (FTNT)
Fortinet stock escaped a year-long stagnant trend in May, gapping from $90 to $108 post-earnings to launch a sequence of higher highs and higher lows – with the rising 50-day acting as a floor on pullbacks.
Trading near $174 currently, the company’s share price has consolidated in the $150–$175 band since July.
But technical posture remains intact: the 50-day sits at $160 and rising, above the 200-day MA at roughly $114, while an RSI of 58 reflects balanced, non-overbought momentum.
Key support holds at $150, the level that has repeatedly attracted buyers during this consolidation.
Fundamental demand is sustained by corporate firewall upgrades and network architecture refresh cycles. Brown remains bullish on the breakout, but cautions that Fortinet’s history of sharp post-earnings drawdowns requires a tighter risk leash than CrowdStrike.
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