In an increasingly digital world, the risk of data breaches, hacks, and various other crimes is constantly growing. The cybersecurity industry has emerged as the primary defense against cybercrime. It protects businesses, government agencies, and individual customers against threats ranging from malware and phishing attacks to ransomware, cryptocurrency-related thefts, and exploitation of vulnerabilities in new internet-enabled devices.

The growth of the cybersecurity industry presents an opportunity for investors, as the number of publicly traded firms specializing in cybersecurity has grown as well. Still, despite strong demand and growth industry wide, the cybersecurity space requires some special considerations and provides a unique set of opportunities and risks for investors. It’s important to know how to approach investing in this industry before jumping in.

What Is Cybersecurity?

Cybersecurity is the practice of defending data, devices, and networks from criminal use and unauthorized access, as well as protecting the integrity and security of information. Some of the most common cyberattacks include malware (unwanted files or software that may harm a connected device or otherwise compromise data), social engineering, and phishing attacks that seek to gain unauthorized access to accounts, cryptocurrency thefts, and more.

Cybersecurity is essential today because nearly every system across society relies on computers and the internet, introducing vulnerabilities that are potentially exploitable by attackers at countless points. The different subfields of cybersecurity include:

• Information technology, tasked with securing networks and investigating breaches or data leaks
• IT auditing, responsible for ensuring compliance and standards across networks
• Ethical hacking, charged with attempting to identify system vulnerabilities in the manner of a malicious hacker
• Threat intelligence, responsible for collecting and organizing data around popular and new attack behaviors
• Digital forensics, the process of determining how a successful attack was accomplished so it may be prevented in the future
• Cryptography, writing code to protect important data

Cybersecurity Market Size and Outlook

The global cybersecurity market is valued at roughly $215 billion in 2025 and is expected to more than triple to $697 billion in the next 10 years. Sustained demand for hardware, software, and cybersecurity services should drive a compound annual growth rate of 11.3% during that time.

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How To Invest in Cybersecurity

First Considerations

Investors considering a way to capitalize on the growing cybersecurity industry should first consider their risk tolerance relative to the space. Cybersecurity firms are in demand, but the industry is populated by both established companies and smaller, much riskier plays. Further, even the most stalwart cybersecurity firms can experience unanticipated turbulence. For example, in July 2024, an update to the software of industry leader CrowdStrike (​​CRWD) caused a global tech disruption, causing a temporary plunge in share price.

Besides risk, investors should also consider how and whether cybersecurity companies can match their individual investment goals. Many of these firms are poised for growth, but they may also be less likely to appeal to dividend investors.

2 Ways To Invest in Cybersecurity

The two primary ways for retail investors to gain exposure to the cybersecurity industry are through individual stocks and cybersecurity-focused exchange-traded funds (ETFs).

1. Individual Stocks

For stocks, investors must keep in mind the goals of individual companies and that different firms attempt to take on various aspects of the work of the cybersecurity industry. 

Endpoint providers, for example, aim to protect the perimeter of a network through secure entry points, while network security vendors might offer services aimed at protecting individual users and their data and devices. Still other companies integrate cybersecurity strategies into other national defense and aerospace applications, providing a natural crossover between industries.

When evaluating individual stocks, consider fundamental and technical metrics before entering a position. Investors might also see whether a particular company has flashing growth metrics, such as the price-to-sales ratio, that may indicate its potential to grow. Look at recent earnings reports and trends in revenue, earnings per share (EPS), customer base, and more. It’s also essential to see how companies adapt to changing threats—does a firm have the capacity to introduce new security tools? Or is it more reliant on a popular but static offering that may lose effectiveness over time?

Once an investor has identified potential targets among individual cybersecurity stocks, purchasing them through a traditional or online broker is likely the next step. 

2. ETFs

For many investors, the easiest way to gain broad access to cybersecurity firms is through a related ETF, such as the First Trust NASDAQ Cybersecurity ETF (CIBR). 

Like other ETFs, cybersecurity funds include a basket of stocks within this space, providing automatic diversification and taking the burden of portfolio management out of the hands of the individual investor. On the other hand, ETFs do charge a modest fee in the form of an expense ratio. 

Further, some funds may include cybersecurity stocks alongside a broader range of other IT or tech-focused companies, so investors will need to decide if they want to exclusively focus on cybersecurity firms or if they are comfortable with a broader view.