Cybersecurity Ruled – A New Market Leader is Emerging.
The cybersecurity sector has been one of the standout performers of 2025, driven by a perfect storm of escalating digital threats and the rapid integration of Artificial Intelligence. As we look toward 2026, a critical question emerges for investors: Is there still room for growth in the “best-of-breed” specialists, or will the platform giants continue to devour the market share?
The Rise of the Cybersecurity Platform
According to a recent analysis by Morgan Stanley, the market has witnessed a significant performance gap over the last twelve months. Shares of major platform providers—specifically CrowdStrike, Zscaler, and Palo Alto Networks—have surged, significantly outperforming smaller, specialized “point product” vendors.
This shift is fueled by a fundamental change in how enterprises approach security. Despite an uncertain economic backdrop that has made many businesses hesitant to increase general IT spending, cybersecurity remains a “must-have” priority. However, instead of adding more complexity, firms are now looking to simplify.
“Cybersecurity remains a largely best-of-breed market, with the average enterprise still deploying more than 50 different security tools, though willingness to consolidate continues to grow,” the analysts noted.
Why Platforms are Winning
The “Platformization” trend is being driven by three key factors: Efficiency and Integration: Managing 50+ disparate tools is a logistical nightmare. Platforms allow companies to bring their online security tools together in one cohesive environment.
AI Synergy: Large platforms have access to massive data pools, allowing their AI-driven defense mechanisms to learn and adapt faster than isolated products .Economic Resilience: Large-cap security names have provided consistent “proof points” of strong momentum, often showing reaccelerating growth even when other tech sectors cooled.
Is the “Premium” Too High?
While the outlook for these “multi-year compounders” remains positive through 2026, their success has come at a price. Many of these core platforms now trade at a meaningful premium compared to the rest of the sector. For value-conscious investors, this raises the question: Where is the next pocket of opportunity?
Morgan Stanley suggests that the market may be overlooking specific names that possess strong AI tailwinds and attractive valuations but haven’t yet seen the same meteoric price hikes as the big three.
Beyond the Giants: The New Contenders for 2026
While the platforms dominate the headlines, analysts are turning their attention to firms that bridge the gap between niche specialization and platform-scale utility. Two names highlighted for a “second look” include:
Netskope: A leader in Secure Access Service Edge (SASE), Netskope is well-positioned as companies move away from traditional hardware toward cloud-native security.
SailPoint: As identity becomes the new “perimeter” in a world of remote work and AI-driven social engineering, SailPoint’s focus on identity governance makes it a critical piece of the modern security stack.
Looking Ahead : The trend toward consolidation is expected to extend well into 2026. However, the next phase of market growth may not come from the expensive “megacaps” alone. Investors should keep a close eye on companies that are expanding across “adjacent security silos” while maintaining reasonable entry points. In the high-stakes game of digital defense, the winners of 2026 will likely be those who can prove they are not just a tool, but an essential part of an integrated AI ecosystem.
Published on 24/12/2025
By Nicholas.