Building a retirement portfolio is an important component for financial security. This portfolio can assist with living expenses and make it easier to maintain your current lifestyle. However, some investments are poised to generate higher returns than others.
Putting your retirement funds into a high-yield savings account can leave you behind. Inflation has been growing at a high rate and leaves most savings accounts in the dust. Even though an interest-bearing bank account may give you a higher nominal net worth, your remaining cash will have less purchasing power than it did a few years ago.
The cybersecurity industry presents a long-term opportunity for investors who have plenty of time before they retire. Corporations are investing billions of dollars to fortify their digital defenses. Cybersecurity is projected to maintain a compounded annual growth rate of 9.7% from now until 2030. These are some of the top cybersecurity stocks that are ready to capitalize on the industry’s high growth rate.
Crowdstrike (CRWD)
Crowdstrike (NASDAQ:CRWD) is arguably the best pure cybersecurity stock available right now, even as it endures a lot of heat from the recent global IT outage. It’s important to note that Crowdstrike went haywire because of an update instead of a hacker getting into Crowdstrike’s systems. The latter would be worse and indicate that the company’s software doesn’t offer sufficient protection from threats.
While the update is more manageable and easier to correct in the future, that won’t sit well right now. Shares have dropped by roughly 20% in one week after the global IT outage manifested itself.
Investors’ reaction to the Crowdstrike news is reminiscent of when Okta (NASDAQ:OKTA) got hacked. Many people instinctively rushed for the exits without thinking about the company’s long-term fundamentals. Buying Okta after the initial reaction proved to be a great decision, and Crowdstrike is likely to reward shareholders in the same matter.
Unlike Okta, Crowdstrike actually delivers profits and has impressive growth. Revenue increased by 33% year-over-year (YOY) in Q1 of fiscal year 2025. Profits surged to $42.8 million in Q1 FY2025 compared to $0.5 million profit from the same quarter last year.
CommVault Systems (CVLT)
CommVault Systems (NASDAQ:CVLT) has followed in Crowdstrike’s footsteps by outperforming the stock market. Shares are up by 61% year-to-date (YTD) and have soared by 146% over the past five years. CommVault Systems is a cloud security firm that only has a 33 P/E ratio. It’s also much smaller than Crowdstrike with its $5.4 billion market cap.
The company is benefitting from an annual recurring revenue model that is accelerating revenue growth. Higher growth numbers can support a lofty valuation and more gains for long-term investors. The stock currently offers growth at a reasonable price.
CommVault Systems delivered 10% YOY revenue growth in Q4 FY2024 and comfortably exceeded the high end of guidance. That’s an acceleration from 7% YOY full-year revenue growth. Subscription revenue was a major highlight, increasing by 23% YOY in the full-year. As subscription revenue continues to grow at a faster rate than overall revenue, the company should deliver higher gains for long-term investors.
Microsoft (MSFT)
Microsoft (NASDAQ:MSFT) is also a big name in the recent global outage, but the dip presents a long-term buying opportunity. While the global outage was unpleasant and caused many delays, Microsoft has decades of experience. The company has navigated controversies and setbacks in the past, and it delivers robust growth in multiple verticals.
The tech giant has many business segments of advertising, gaming, business software, artificial intelligence (AI), social media and others. However, Microsoft’s most important business vertical is its cloud platform.
Microsoft Cloud regularly delivers more than half of the company’s total revenue. That trend continued in Q3 FY2024 as Microsoft Cloud revenue increased by 23% YOY. Many businesses store their data on the cloud to stay more organized. Also, Microsoft Cloud has built-in security features that keep hackers at bay.
Further, the tech conglomerate unveiled Copilot for Security earlier this year. This product makes it easier for small businesses and corporations to fortify their digital defenses. It uses AI to streamline various cybersecurity tasks. Microsoft’s overall business model is also doing well based on 17% YOY revenue growth and 20% YOY net income growth.
A global outage won’t stop customers from storing data online, and many companies turn to Microsoft Cloud. Many investors have the outage on their minds, but it will be a distant memory in a few years as the company continues to gain market share.
On this date of publication, Marc Guberti held long positions in CRWD, CVLT, and MSFT. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.