The Great Rotation Hit Cybersecurity Stocks Hard. Smart Investors Are Buying the Dip.

By Robert Izquierdo – Apr 16, 2026 at 8:00PM ESTKey PointsWall Street’s shift away from the technology sector in 2026 led to a sell-off in cybersecurity stocks.Cybersecurity companies Palo Alto Networks, SentinelOne, and Zscaler are successful businesses with double-digit year-over-year sales growth.These enterprises have seen their share price valuations fall to multiyear lows.The arrival of artificial intelligence (AI) supercharged technology stocks in recent years, but the situation changed in 2026. Wall Street's "great rotation" away from tech stocks caused a sharp drop in the share prices of cybersecurity companies. Now, investors have an opportunity to scoop up stocks in the sector at attractive valuations. Buying the dip makes sense because cybersecurity is a necessity to safely navigate online. That's why the industry is forecast to grow from $248 billion in 2026 to $699 billion by 2034. In fact, Palo Alto Networks (PANW +1.74%) CEO Nikesh Arora took advantage of the situation to buy company shares worth about $10 million in March. This was his first buy since 2019. Here's a look at this situation and why it makes sense to buy cybersecurity stocks now. Image source: Getty Images. Cybersecurity remains a resilient sector In early 2026, Wall Street believed that artificial intelligence (AI) could usurp cybersecurity companies' business. But several factors make that possibility unlikely. The stakes are too high for organizations to entrust IT security to unproven AI substitutes from the likes of Anthropic, despite its release of an AI capable of finding software vulnerabilities. Look no further than CrowdStrike's technical glitch in 2024 for an example of cybersecurity's central role in today's digital world. The company's mistake caused global disruption to airlines, banks, and hospitals. Rather than lose to AI, the more likely scenario is for cybersecurity enterprises to partner with the companies building artificial intelligence.

Both Palo Alto Networks and SentinelOne (S +5.17%) are collaborating with Alphabet-owned Google Cloud to ensure AI infrastructure is protected. ExpandNASDAQ: PANWPalo Alto NetworksToday's Change(1.74%) $2.86Current Price$166.97Key Data PointsMarket Cap$134BDay's Range$165.00 - $170.2552wk Range$139.57 - $223.61Volume7.2MAvg Vol11MGross Margin73.50% Moreover, several IT security providers have already woven artificial intelligence into their platforms. A prime example is SentinelOne, an early adopter of the tech, having built AI into the core of its systems from inception. Cybersecurity stocks to consider buying Sales are going strong for several cybersecurity companies, indicating demand remains robust for their services.

In Palo Alto Networks' fiscal second quarter, ended Jan. 31, revenue rose a strong 15% year over year to $2.6 billion. SentinelOne's sales for its fiscal Q4, ended Jan. 31, totaled $271.2 million. This sum represented 20% growth over the prior year, allowing the company to surpass $1 billion in full-year revenue for the first time. ExpandNYSE: SSentinelOneToday's Change(5.17%) $0.69Current Price$13.95Key Data PointsMarket Cap$4.5BDay's Range$13.53 - $13.9652wk Range$11.81 - $21.40Volume199KAvg Vol8.7MGross Margin73.86% Along with Palo Alto Networks and SentinelOne, zero-trust cloud specialist Zscaler (ZS +2.50%) is another top cybersecurity company that experienced substantial share price drops this year. Zscaler boasted sales growth of 26% year over year to $815.8 million in its fiscal Q2, ended Jan. 31. ExpandNASDAQ: ZSZscalerToday's Change(2.50%) $3.28Current Price$134.29Key Data PointsMarket Cap$21BDay's Range$132.77 - $138.0052wk Range$114.63 - $336.99Volume186KAvg Vol3MGross Margin76.28% Revenue for Palo Alto Networks, SentinelOne, and Zscaler reveals their businesses are booming. Now, contrast this with their share price valuations, as shown by the price-to-sales ratio. Data by YCharts. The chart shows that the stocks of all three companies are trading at sales multiples hovering near multiyear lows. SentinelOne and Zscaler stand out for how far their price-to-sales ratios have fallen, suggesting their shares are particularly cheap. With the cybersecurity industry projected to expand and many companies in the sector trading at low valuations, there may be no better time than now to scoop up shares.Read NextApr 13, 2026 •By Micah ZimmermanWall Street Is Wrong About AI Killing Software Stocks.

This Cybersecurity Growth Stock Proves It.Apr 13, 2026 •By Anthony Di PizioThis Artificial Intelligence (AI) Stock Just Hit an All-Time Low, But Wall Street Says It's Time to BuyApr 10, 2026 •By John BallardIs SentinelOne the Best Cybersecurity Stock to Buy in the Current Sell-Off?Mar 29, 2026 •By Manali Pradhan, CFAWall Street Is Sleeping on This $13 Stock -- and That's Your OpportunityMar 20, 2026 •By Will HealyGot $3,000? 2 AI Stocks Wall Street Analysts Say Could Double From Here.Mar 19, 2026 •By Robert IzquierdoIs SentinelOne Stock a Buy or Sell After Its CEO Dumped Shares Worth Over Half a Million Dollars?About the AuthorRobert "Izzy" Izquierdo is a contributing Motley Fool stock market analyst covering information technology, consumer discretionary, consumer staples, and communication services sectors. Prior to The Motley Fool, Izzy was head of product management at Target Media Partners, developing and launching multimillion-dollar software used by businesses such as Charter Communications. Prior to that, he worked at Yahoo! and startups on software products in connected TV, AI, consumer apps, and digital advertising. He holds a bachelor’s degree in English literature from UCLA and is certified in software product management.TMFWryWriteStocks MentionedSentinelOneNYSE: S$13.93(+5.05%)+$0.67Palo Alto NetworksNASDAQ: PANW$167.06(+1.80%)+$2.95ZscalerNASDAQ: ZS$134.29(+2.50%)+$3.28*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.