Alphabet’s (GOOGL Quick QuoteGOOGL - Free Report) recent agreement to acquire cloud security firm Wiz for $32 billion marks its largest deal in history and signals a major shift in the cybersecurity landscape. As competition in cloud computing and AI security heats up, cybersecurity companies like Okta Inc (OKTA Quick QuoteOKTA - Free Report) and Fortinet (FTNT Quick QuoteFTNT - Free Report) could see significant upside.

Google’s $32B Bet on Cybersecurity

Google’s cloud division is rapidly expanding, with annual revenues jumping 64% from $26.3 billion in 2022 to $43.2 billion last year. However, Google lags behind Microsoft (MSFT Quick QuoteMSFT - Free Report) and Amazon (AMZN Quick QuoteAMZN - Free Report) in the cloud computing industry. Acquiring Wiz, a cybersecurity startup specializing in cloud security and AI-driven protection, helps Google compete more aggressively in the multi-trillion-dollar cloud market.

This deal also reflects the fact that cybersecurity is becoming essential for cloud computing. With AI driving new security threats, companies are increasingly prioritizing security solutions—a trend that directly benefits Okta and Fortinet.

How OKTA Stands at the Forefront of Cybersecurity’s Future

Okta is well-positioned to benefit from the rising focus on identity security, driven by increased cloud adoption and growing regulatory demands. With the continued rise of multi-cloud environments, organizations are facing more complex identity security challenges. Okta addresses these concerns through its Identity Governance and Access Management solutions, ensuring seamless and secure user authentication across cloud platforms. The company has emphasized its commitment to security by launching the Okta Secure Identity Commitment initiative, which strengthens its position as a trusted cybersecurity leader. Additionally, its growing suite of identity security solutions, including Identity Governance, Privileged Access and Identity Threat Protection, highlights its role in mitigating identity-based cyber threats.

Regulatory compliance remains a key driver for Okta’s growth, as governments and corporations enforce stricter security mandates. Okta’s solutions cater to these requirements by providing enhanced security features that help organizations meet compliance standards. The company's recent updates to its Customer Identity platform for the U.S. public sector further illustrate its commitment to meeting stringent security regulations. Moreover, Okta's focus on specialized sales teams for IT security and developer markets ensures tailored solutions for enterprise customers, driving adoption across industries.

How FTNT is Shaping the Future of AI-Driven Cybersecurity

Fortinet is positioned to benefit from rising cybersecurity investments, as highlighted by its strong 17% revenue growth in the fourth quarter of 2024 and 18% growth in product revenues — its highest in six quarters. The increasing adoption of AI-driven cybersecurity and Secure Access Service Edge (SASE) solutions has fueled demand for Fortinet’s unified security platform. The company’s Unified SASE revenues grew 13%, now accounting for 23% of total business, demonstrating the growing necessity of integrated network security. With AI-powered security solutions and the acquisition of Perception Point, Fortinet has expanded its cybersecurity footprint beyond firewalls to email and collaboration security, further strengthening its end-to-end protection capabilities.

Additionally, Fortinet’s AI-driven security and automation strategy aligns with the industry's shift toward consolidated security platforms. The company’s FortiGuard AI-powered security services provide real-time threat intelligence, while its FortiAIOps and FortiAI solutions streamline threat detection and response???. As enterprises seek cost-effective, scalable security solutions, Fortinet’s single-operating system strategy (FortiOS) and proprietary ASIC technology offer superior performance with reduced costs. With Google’s $32 billion Wiz acquisition underscoring the critical role of AI-driven cloud security, Fortinet is well-positioned to capitalize on the surge in cybersecurity demand, making it a compelling investment opportunity.

Bigger Picture & Final Verdict: Bet on OKTA & FTNT?

Google’s agreement for a $32 billion investment in cybersecurity highlights big tech’s growing focus on digital security, setting the stage for increased industry consolidation. As cyber threats become more sophisticated, demand for identity security solutions like Okta and network security offerings from Fortinet is expected to rise.

This move could prompt other tech giants like Microsoft and Amazon to acquire cybersecurity firms to strengthen their security capabilities. With consolidation on the horizon, cybersecurity leaders like Okta and Fortinet may see higher valuations, benefiting from the industry’s rapid growth and rising investment trends.

Thus, investors looking to capitalize on this trend now should bet on OKTA and FTNT since the firms are prime beneficiaries of the cybersecurity boom. Both the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.