AI and Cybersecurity: The Key Companies Shaping 2025

In partnership with

The AI Investing Pulse

January 16th, 2025

In this week’s edition:

1. Analysis - AI and cybersecurity: the key companies shaping 2025

2. Stock Ideas - BofA names 3 AI stocks in the software sector

3. News - Nvidia CEO: "AI agents likely to be a multitrillion-dollar opportunity”

4. Startups - What AI driven innovations set startups apart

5. Trends -  The 2025 Consumer Electronics Show (CES) trends

6. Other News - Seizing generative AI to forecast economic trends

AI and Cybersecurity: The Key Companies Shaping 2025

This week, we focus on the rapidly evolving intersection of cybersecurity and AI. With the proliferation of AI technologies and the rise of autonomous systems, safeguarding digital environments has never been more critical. Cybersecurity has become a central concern for businesses and governments alike, creating significant opportunities for investors in this burgeoning sector.

What is AI Cybersecurity?

AI cybersecurity refers to the application of artificial intelligence and machine learning (ML) technologies to protect digital systems, networks, and data from cyber threats. Unlike traditional security methods, AI-powered solutions leverage real-time data analysis and predictive modelling to identify and neutralise threats more efficiently.

Core Features of AI Cybersecurity:

• Threat Detection: AI can detect anomalies and suspicious activities that might otherwise go unnoticed.

• Automation: AI systems enable faster incident responses by automating routine security tasks.

• Adaptability: Machine learning models continuously evolve to counter new and emerging threats.

• Scalability: AI solutions are designed to handle large-scale environments, making them ideal for enterprises.

The Cybersecurity Opportunity

The Global Cybersecurity Outlook 2025 by the World Economic Forum underscores the immense potential for growth in this space. Cybercrime costs are projected to reach US$10.5 trillion annually by 2025, driving unparalleled demand for advanced cybersecurity solutions. For investors, the integration of AI into cybersecurity presents compelling opportunities:

• Economic and Market Potential: The global cybersecurity market is expected to exceed $300 billion by 2027, with AI-driven solutions leading the charge. Companies like Palo Alto Networks and CrowdStrike are delivering innovative, scalable technologies that are essential for modern digital defences.

• Growing Demand: Industries undergoing digital transformation require robust security systems, creating a steady revenue stream for cybersecurity leaders.

• AI Integration Advantage: Companies that incorporate AI into their cybersecurity offerings are gaining a significant competitive edge, improving threat detection and response.

• Investor Confidence: Firms leading this space, such as Fortinet and Zscaler, are demonstrating strong financial performance and strategic innovation.

While opportunities abound, investors should also consider challenges in this rapidly evolving sector.

• AI-Driven Threats: Cybercriminals are leveraging AI to create adaptive malware, deepfake technology, and automated phishing schemes, necessitating continuous innovation.

• Data Dependency: Effective AI systems require high-quality data, and poor datasets can lead to inaccurate threat detection.

• Complexity vs Scalability: Implementing advanced cybersecurity measures requires significant expertise and resources, which may limit access for smaller organisations.

Three Leading Stocks in AI Cybersecurity

CrowdStrike Holdings (CRWD)

CrowdStrike is renowned for its Falcon platform, which provides AI-driven endpoint protection, threat intelligence, and proactive incident response. The company’s solutions are highly scalable, making them ideal for enterprises of all sizes. In 2024, despite causing one of the biggest IT blackouts in July, CrowdStrike expanded its customer base significantly and delivered impressive financial results. Its continuous investment in AI technology and innovation solidifies its reputation as a leader in cybersecurity, highlighting its importance as a leading company in AI-driven cybersecurity.

Palo Alto Networks (PANW)

Palo Alto Networks is a trailblazer in cybersecurity, offering advanced solutions like its Cortex XDR platform, which uses AI to automate threat detection and response. The company’s focus on next-generation firewalls and secure cloud applications has earned it a dominant position in the market. With robust revenue growth, a strong global customer base, and strategic investments in AI and cloud security, Palo Alto is poised for continued success and underscoring its role as a major player in the cybersecurity industry.

Fortinet (FTNT)

Fortinet delivers a comprehensive suite of cybersecurity solutions powered by AI, addressing network, cloud, and operational technology security. Its FortiAI system enhances threat detection and prevention, while the Secure SD-WAN solution seamlessly integrates security with networking, catering to the demands of hybrid work environments. Fortinet’s strong market presence, high customer satisfaction, and focus on innovation position it as a leader in cybersecurity, positioning it as a strong contender in the evolving cybersecurity market.

Other Companies:

• Zscaler (ZS): Focuses on providing secure internet access and protecting cloud-based applications with advanced tools.

• Okta (OKTA): Simplifies identity verification, ensuring only authorised users access critical systems.

• SentinelOne (S): Uses AI to protect computers and networks from online threats.

• CyberArk Software (CYBR): Specialises in protecting sensitive data and systems by controlling access to important files and accounts.

• Rapid7 (RPD): Helps companies identify weaknesses in their systems and respond to potential attacks.

• Varonis Systems (VRNS): Protects sensitive data by monitoring how it is accessed and used.

• Cloudflare (NET): Provides a global network that enhances internet performance and security, protecting websites and applications from cyber threats while ensuring fast and reliable connectivity.

Cybersecurity is at the forefront of the digital revolution, with AI transforming how threats are detected, prevented, and managed. This sector showcases significant developments and advancements worth monitoring.

The cybersecurity landscape in 2025 is defined by both challenges and opportunities. As AI continues to reshape industries, the integration of robust cybersecurity measures will remain essential for sustaining digital trust. Companies that successfully merge AI with cutting-edge security practices will unlock immense value, not only for their customers but also for their investors.

_{Disclaimer - This content is provided for informational purposes only and does not constitute investment advice, personal recommendations, or an invitation to engage in any investment activity. The information presented is derived from publicly available sources and should not be solely relied upon for making investment decisions. Always consult with a qualified financial professional before making investment choices.}

TOP AI STOCKS

TOP AI ETFs

AI STOCKS IDEAS 

BofA name 3 AI stocks in the software sector - Markets Insider

One AI stock that Cathie Wood (ARK Invest) keeps buying - MSN

Analysts think this AI stock could rally 20% - Barchart

Why the QQQ is currently my top AI ETF - Yahoo Finance

AI STOCKS & ETFs NEWS 

Nvidia CEO Jensen Huang: "AI agents likely to be a multitrillion-dollar opportunity"- The Motely Fool - During last week's CES 2025, Nvidia CEO Jensen Huang shared projections about the agentic AI market that should excite investors.

Mark Zuckerberg joined Nvidia's CEO in doubting quantum computing — and the stocks plunge again - Quartz - Quantum computing stocks were plunging again on Monday after another major tech leader cast doubts on the technology’s usefulness in the near future.

Biden signs ambitious order to bolster energy resources for AI data centers - AP News - The executive order seeks to ensure the infrastructure needed for advanced AI operations, such as large-scale data centers and new clean power facilities, can be built quickly and at scale in the United States.

Meta platforms analyst expects 'strong momentum' In Q4 to continue in 2025 - Benzinga - Goldman Sachs analyst Eric Sheridan maintains a buy rating on Meta and raises his 12 month price target from $630 to $688 ahead of earnings.

AI STARTUPS

What AI-driven innovations set startups apart - TechBullion - Discover how AI-driven innovations are revolutionising startups, featuring insights from industry experts.

Burkhan World Investments announces Blaize’s successful IPO on NASDAQ - Business Wire - The IPO represents the first AI public offering of 2025, achieving a $1.2 billion valuation.

Greek AI startups attracted over €123 million, ranking second in Central and Eastern Europe - Greek City Times - Greece is emerging as one of the leading players in Artificial Intelligence (AI) in Central and Eastern Europe.

AI TRENDS

The 2025 trends at the Consumer Electronic Show - VML- The 2025 CES once again delivered a dose of transformational technology.

2025 workplace trends highlight the push for flexibility and the rise of AI - NBC - As we step further into 2025, significant shifts are reshaping workplace norms. The office life might not feel the same 12 months from now.

What’s next for AI in education? 25 AI predictions for 2025 - eSchool News - AI-powered solutions have reached a tipping point from being a nice-to-have to a must-have in order to deliver compelling and competitive education experiences.

OTHER

Seizing generative AI to forecast economic trends - Phys Org - The researchers utilised AI to analyse transcripts from corporate conference calls and extract information on managers' expectations for various economic indicators.

Why AI agents could revolutionise trading as we know it - Yahoo Finance - Artificial intelligence is reshaping the financial world, and AI agents, programs capable of making autonomous decisions based on user-defined permissions are poised to take centre stage.

Start learning AI in 2025

Everyone talks about AI, but no one has the time to learn it. So, we found the easiest way to learn AI in as little time as possible: The Rundown AI.

It's a free AI newsletter that keeps you up-to-date on the latest AI news, and teaches you how to apply it in just 5 minutes a day.

Plus, complete the quiz after signing up and they’ll recommend the best AI tools, guides, and courses – tailored to your needs.

Sign up to start learning.

_{Disclaimer - The information contained on this newsletter does not constitute investment advice or a personal recommendation, nor is it an invitation or inducement to engage in investment activity. You should seek independent financial and, if appropriate, legal advice as to the suitability of any investment decision. Past performance is not a guide to future performance. The value of investments, and the income from them, can fall as well as rise. You may not get back the full amount invested and, in some cases, nothing at all. The information presented is based on publicly available data and sources believed to be reliable; however, its accuracy or completeness cannot be guaranteed. Market conditions can change rapidly, and the information provided may no longer be up to date. This content is for informational purposes only and should not be construed as financial, legal, or tax advice.}