Within the past month, a handful of well-known UK companies have been hit by serious cyberattacks. These were Marks and Spencer from the FTSE 100, Harrods, and Co-Op. Unfortunately, it’s almost certain they won’t be the last. Here, I want to highlight two stocks from the cybersecurity sector that I think are worth considering for long-term investors.
CrowdStrike
First, let’s start with CrowdStrike (NASDAQ: CRWD). This cybersecurity firm made headlines for all the wrong reasons last summer when a faulty update to its Falcon security software caused millions of Microsoft Windows machines to crash. This led to widespread disruptions across various sectors, including airlines, banks, and hospitals. Oops.
Events like this highlight the risks for software firms. CrowdStrike cannot afford another high-profile mishap like that. It would destroy customer trust and likely lead to contract losses.
Still, I added to my holding in August after the company’s share price dropped 44% in a month. The stock has rebounded over 70% since, making that a timely purchase.
The reason I did so was because the incident was a self-made blunder by CrowdStrike rather than a breach of its cloud-native cybersecurity platform. That remains industry-leading, and despite last year’s gaffe, the firm’s annual recurring revenue (ARR) still grew 23% year on year to $4.24bn.
Longer term, the target is for ARR of $10bn, which CrowdStrike is confident it can still hit. Adoption of its various AI-powered cybersecurity modules remains very strong. The more customer threats that the firm’s platform repels, the more data it collects. This sharpens its detection models and strengthens protection for all other customers.
Looking ahead, analysts expect the company’s revenue and profits to grow in the 20%-30% range over the next three years. And while founder-CEO George Kurtz is at the helm, I don’t expect the company’s focus or innovation to slip.
The stock is far from cheap today. But given CrowdStrike’s best-in-breed status in endpoint and cloud-native cybersecurity, I think it’s worth considering for investors with a five to 10-year horizon.
Safety in numbers
If buying a pricey cybersecurity stock seems too risky, investors might want to consider Legal & General Cyber Security UCITS ETF (LSE: ISPY). This exchange-traded fund (ETF) is invested in around 41 different cybersecurity stocks.
The top holding today is, you guessed it, CrowdStrike. However, the ETF has all the other industry leaders, including Cloudflare (another stock I own), Palo Alto Networks, CyberArk Software, and SentinelOne.
One risk to bear in mind is that these stocks — many of which are highly valued — could fall sharply if the US enters a recession. This would impact the ETF’s value.
Nevertheless, I’m bullish on the rise of cybersecurity, particularly as AI is increasing both the frequency and sophistication of cyberattacks. Last year, the UK’s National Cyber Security Centre received three times the number of severe attacks than the year before.
Today we are declassifying an intelligence assessment that shows AI is going to increase not only the frequency but the intensity of cyberattacks in the coming years.
Pat McFadden, Labour cabinet office minister responsible for UK cybersecurity, May 2025
According to Statista, the AI cybersecurity market is set to reach nearly $134bn by 2030, up from $24.3bn in 2023. Essentially this ETF is a play on that projected long-term growth.
