The Morning Filter 3 Cybersecurity Stocks to Invest In as AI Reshapes Industries
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Mar 19, 2026 Malik Ahmed Khan, a Morningstar senior equity analyst who covers cybersecurity, breaks down which cyber segments are growing fastest and why platform vendors may consolidate the market. He discusses AI’s dual-use effects, how moats form through switching costs and data advantages, and highlights three cyber stocks he finds most attractive today.
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AI Is Dual Use And Raises Security Spending
- AI is dual use so defenders and attackers both gain capabilities, which increases overall cyber spending.
- Improved detection from AI also helps attackers find vulnerabilities faster, creating a net elevation in security budgets.
AI Quality Scale Separates Platform Winners
- Morningstar ranks cyber firms on an AI quality scale to see who benefits most from AI.
- CrowdStrike, Palo Alto, Fortinet, and Zscaler score highest due to data richness, customers, and product monetization potential.
Switching Costs Create Durable Cyber Moats
- Switching costs are the primary source of economic moats in cybersecurity.
- High dollar-based retention (around 95%) implies long customer lifetimes and makes ripping and replacing vendors unlikely.