Is Radware Ltd. (RDWR) The Best Performing Cybersecurity Stock So Far in 2025?
While the Trump administration's shifting tariff policy, which includes the announcement of steep tariffs followed by a 90-day pause on many import taxes, has prompted some economists to predict a recession within the next year, financial analysts believe the cybersecurity sector could prove to be relatively resilient. Wedbush Securities analysts see cybersecurity as a 'defensive' investment that can help investors weather what they call an impending 'Category 5 storm.' Another tailwind for the industry comes in the form of increased cyberthreat activities following economic downturns. These add to the momentum of rising cyberattacks expected by analysts for this year.
Although tariffs are projected to have a minimal direct impact on cybersecurity, as most of companies in the industry focus on services rather than physical products, Sonu Shankar, chief product officer of Phosphorus Cybersecurity, an IoT security company, points out that as other industries suffer financial strain and restrict their budgets, spending on security may also face cuts.
As companies go through an increasingly complicated cyber threat landscape, keeping up with developing cybersecurity trends has become critical. According to McKinsey, global spending on cybersecurity products and services hit the $200 billion mark in 2024, a significant increase from $140 billion in 2020, as the number and sophistication of attacks increase. In addition, the cybersecurity industry is expected to grow at an annual rate of 12.4% between 2024 and 2027, surpassing historical growth rates as firms ramp up efforts to combat evolving threats.
Cybersecurity has undoubtedly grown in relevance as more government services and data become digitized, according to Samir Jain, vice president of policy at the Center for Democracy & Technology, a non-profit that promotes digital rights and freedom of speech. Moreover, as cyber attacks become more complex, the demand for trained workers has increased drastically, with cybersecurity companies forecasting that over 3.5 million cybersecurity roles would remain vacant by 2025. As a result, there are calls for broadening recruiting processes to expand the candidate pool.
For this list, we sifted through financial media reports and identified cybersecurity stocks that were popular among elite hedge funds and favored by analysts. We then checked their year-to-date performance and selected the 11 best performing stocks from our initial pool of 35 popular stocks. The names on this list appear in ascending order of their year-to-date performance, as of April 25.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points ().
A secure data center showing the cyber security measures taken to protect company operations.
Radware Ltd. (NASDAQ:RDWR) is an Israeli systems software company that offers cybersecurity and application delivery solutions for cloud, on-premises, and software-defined data centers globally. In its Q1 2025 report, Forrester Wave: Web Application Firewall Solutions named Radware Ltd. (NASDAQ:RDWR) a Strong Performer. The report emphasized the company's top scores in six key categories, including detection models, product roadmap, price flexibility, and transparency.
On March 5th, Radware Ltd. (NASDAQ:RDWR) entered into a managed security service provider (MSSP) agreement with CHT Security, a subsidiary of Taiwan's largest telecom, Chunghwa Telecom Co. The partnership would allow CHT Security to use Radware Ltd.'s AI-powered Cloud Application Protection Services and DefensePro suite to strengthen its product line and provide clients with next-generation application security.
Radware Ltd. (NASDAQ:RDWR) also posted robust fourth-quarter 2024 results, exceeding analyst expectations with significant increases in both earnings per share and revenue. The company's earnings per share climbed to $0.27, beating the forecasted $0.22, while revenues increased to $73 million, exceeding the predicted $70.56 million.
Overall, RDWR ranks 11th on our list of best performing cybersecurity stocks so far in 2025. While we acknowledge the potential for RDWR as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than RDWR but trades at less than 5 times its earnings, check out our report about this .
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