Key points
- Cybersecurity lost three public companies to acquisitions in about a year: Secureworks ($859 million, bought by Sophos), Juniper Networks ($14 billion, bought by HPE), and CyberArk ($25 billion, bought by Palo Alto Networks).
- Palo Alto Networks (PANW) and CrowdStrike (CRWD) are worth more than $450 billion combined, over half the total market cap of the 21 public cybersecurity stocks left standing.
- The rest splits into nine large caps worth $13 billion to $111 billion, seven mid caps, and three small caps under $2 billion.
- CrowdStrike trades at a negative price-to-earnings ratio and Palo Alto Networks near 291 times earnings, prices that assume years of continued growth.
Three public cybersecurity companies stopped being public companies in the space of about a year. What's left is a sector of 21 stocks that splits sharply by size, from two $200 billion-plus giants down to a handful of small caps worth a few hundred million dollars, and the gap left by the three that got bought is a big part of why the group looks the way it does now.
Three deals in about a year
Secureworks spent nine years as a Dell Technologies subsidiary after its 2016 IPO before Sophos bought the rest outright in an all-cash deal that closed February 4, 2025. The price came to $8.50 a share, about $859 million total, a 28% premium to where the stock had been trading. Sophos itself is owned by the private equity firm Thoma Bravo, and folding in Secureworks' Taegis platform made it the largest pure-play provider of managed detection and response services, with a combined 28,000 customers across both brands.
HPE's acquisition of Juniper Networks took the longest to actually close. Announced in January 2024, it didn't clear antitrust review for 18 months, finally going through on July 2, 2025, and only after Hewlett Packard Enterprise (HPE) agreed to divest its Instant On campus and branch WLAN business and license some Juniper software to competitors. The price once it closed: $40 a share in cash, $14 billion total. Juniper is a networking company first, but its security business, and HPE's stated goal of doubling its own networking division, are why it belongs on this list.
Palo Alto Networks (PANW) is the deal that actually happened inside the cybersecurity sector itself. It agreed to acquire the identity security company CyberArk on July 30, 2025. The deal closed February 11, 2026. Payment wasn't pure cash like the other two. CyberArk shareholders got $45 a share plus 2.2005 shares of Palo Alto stock. That worked out to an equity value near $25 billion, a 26% premium to where the stock had been trading before the deal. Palo Alto's own language on the deal was blunt about the goal, giving customers "a single, trusted vendor" for identity, network and cloud security instead of stitching together products from separate companies.
What's left, from $264 billion to $330 million
Two names sit well above everyone else. Palo Alto Networks' market cap is near $264 billion. CrowdStrike (CRWD) is close behind at $186 billion. Add them together and that's more than $450 billion, over half the combined value of the entire sector.
The rest breaks into three tiers by market cap. The large caps, worth $13 billion to $111 billion, are where most of the household names live. Cloudflare (NET) is as much a security company at this point as a content delivery one, and Gen Digital (GEN) is the company behind Norton, Avast and LifeLock.
| Company | Ticker | Market cap |
|---|---|---|
| Fortinet | FTNT | $111B |
| Cloudflare | NET | $93B |
| Verisign | VRSN | $24B |
| Okta | OKTA | $23B |
| Zscaler | ZS | $23B |
| F5 | FFIV | $22B |
| Akamai | AKAM | $18B |
| Gen Digital | GEN | $15B |
| Check Point Software | CHKP | $13B |
The mid and small caps are smaller, more specialized businesses that never scaled into the tier above, several of them acquisition candidates in their own right. SailPoint (SAIL) is an identity security company that re-IPO'd in 2025, and Telos (TLS) is the smallest of the group.
| Company | Ticker | Market cap |
|---|---|---|
| SailPoint | SAIL | $8B |
| SentinelOne | S | $6B |
| Varonis | VRNS | $5B |
| Qualys | QLYS | $4.7B |
| Tenable | TENB | $3.5B |
| NetScout Systems | NTCT | $2.9B |
| A10 Networks | ATEN | $2.6B |
| Radware | RDWR | $1.25B |
| Rapid7 | RPD | $650M |
| Telos | TLS | $330M |
Could more of these get bought?
Palo Alto's own explanation for the CyberArk deal, a single vendor across identity, network and cloud security, is a strategy that doesn't stop at one acquisition. The company has been buying its way into adjacent categories for years, and the logic that justified paying $25 billion for an identity security leader applies just as well to smaller companies in categories Palo Alto or its rivals don't fully own yet: vulnerability management, data security, network performance monitoring. None of the smaller names on this list have an announced deal, and this isn't a prediction that any specific one will. But a sector where two companies already control more than half the combined market cap, and where the biggest of the two just spent $25 billion to add a category it didn't have, is a sector where more consolidation is a reasonable thing to expect, not a surprising one.
What it means
The three companies that disappeared covered three different corners of the business: managed security services, networking, and identity. What replaced them on the public markets was mostly nothing, Secureworks and CyberArk are gone entirely, and Juniper's security business is now a division inside a much larger hardware company rather than something investors can buy on its own. That leaves a smaller list of pure-play public cybersecurity stocks than existed two years ago, concentrated more heavily at the top than before.
My take
I think the category keeps pulling in money. I don't think that's the same thing as a smooth ride for the stocks themselves, and that gap is worth sitting with before treating "cybersecurity" and "cybersecurity stocks" as the same trade.
The demand side looks about as durable as anything in this market. Cyber spending doesn't pause for a slow quarter the way a lot of corporate budgets do, and AI cuts in the sector's favor on both sides of the ledger. It's a new kind of attack, prompt injection, AI-generated phishing, autonomous systems doing things nobody approved, and a new budget line at the same time, not a threat to the category the way generative AI is a threat to a lot of seat-based software pricing. The M&A wave in this piece backs that up. Palo Alto didn't pay $25 billion for CyberArk because it was feeling cautious about where security spending is headed.
The stock side is a different question. Look at the valuations already in this piece. CrowdStrike trades at a negative price-to-earnings ratio, meaning it doesn't have GAAP profit behind that stock price yet. Palo Alto trades near 291 times earnings. Zscaler is negative too. Those are prices that assume years of continued growth, and that kind of pricing is exactly what gets sold hardest whenever the market turns cautious on growth stocks generally, whether or not anything about the underlying security-spending story actually changed that day.
The consolidation wave cuts both ways here too. Every company that gets bought is good for that company's shareholders once, and it's bad for the idea that there will keep being new public ways to own the category. If Palo Alto and CrowdStrike keep absorbing the next tier down, the money flowing into cybersecurity as a category can keep growing while the list of stocks an investor can actually buy to get that exposure keeps shrinking. There's a quieter risk sitting underneath all of it too. Microsoft, Google and Amazon Web Services keep pushing security features into their own cloud platforms, a real long-term margin problem for point-solution vendors even without one dramatic headline forcing the issue.
So here's my actual read: bet on the category, and be more careful about which stock you use to make that bet, especially the ones already priced like the growth never slows down.
Sources
- Palo Alto Networks: agreement to acquire CyberArk, July 30, 2025
- HPE: closes acquisition of Juniper Networks, July 2, 2025
- Sophos: completes Secureworks acquisition, February 4, 2025
- Cybersecurity Dive: Sophos completes $859M acquisition of Secureworks
- Real-time PANW, CRWD, FTNT, NET, VRSN, OKTA, ZS, FFIV, AKAM, GEN, CHKP, SAIL, S, VRNS, QLYS, TENB, NTCT, ATEN, RDWR, RPD and TLS fundamentals via Robinhood market data, July 23, 2026
- Related coverage: Are SaaS stocks AI roadkill or AI winners?
This is general market commentary and opinion, not investment advice. Markets can go down as well as up, and you can lose money. Always do your own research and consider speaking with a licensed financial professional before making any investment decision.
