Morgan Stanley Picks Top 5 Cybersecurity Stocks to Buy with Up to 65% Upside

Morgan Stanley (MS) shared its top cybersecurity stock picks after meeting with company leaders and attending the RSA Conference 2026. The firm highlighted five companies, Microsoft (MSFT), Palo Alto Networks (PANW), CrowdStrike (CRWD), SailPoint (SAIL), and SentinelOne (S), that are well-positioned to benefit from growing AI security as businesses increasingly deploy AI agents across their operations.

For context, Cybersecurity companies develop products and services to protect computers, networks, and data from threats like hacking and malware. Meanwhile, the RSA Conference is the annual global cybersecurity event, where companies share the latest trends and strategies. This year it was held from March 23–26 at the Moscone Center in San Francisco.

Let’s look at these stocks.

Microsoft (MSFT)

Morgan Stanley is moderately positive on Microsoft after talks with its security team. The firm stated that the tech giant is focusing on managing AI agents carefully and protecting their identities like it does for real users. Its Security Copilot tool is now built directly into tools like Defender, Purview, and Entra, making AI agents work smoothly within everyday workflows. Overall, Microsoft now has about 1.6 million security customers and a $20 billion revenue run rate. According to the firm, Microsoft’s key growth drivers include Sentinel, identity services, and E5 adoption.

Morgan Stanley’s five-star-rated analyst Keith Weiss has a Buy rating on MSFT stock with a price target of $650, implying an upside of over 80%.

Palo Alto Networks (PANW)

Today, Morgan Stanley’s analyst Meta Marshall reiterated her Buy rating on PANW stock with a price target of $223, implying an upside of over 50%. She believes the company is well-positioned in AI-driven cybersecurity. Marshall highlighted that as AI grows, security needs become more complex, and PANW’s broad AI portfolio, real-time protection, and products like Prisma AIRS and AI Gateway give it an advantage over companies focusing only on token-based or LLM security.

She added that with recent acquisitions and the stock trading at roughly 18x expected 2027 cash flow, the recent dip presents a good buying opportunity ahead of new products and growth in adoption later this year and into FY27. Year-to-date, PANW stock is down by 20%.

CrowdStrike (CRWD)

Marshall also reiterated her Buy rating on CRWD stock with a price target of $510, implying about 38% upside. The firm has upgraded CrowdStrike to a top pick in the cybersecurity sector, citing its strong position in AI-driven security and a robust endpoint franchise.

Marshall noted that most cyberattacks start at endpoints, and CrowdStrike’s runtime presence, kernel-level access in Microsoft environments, and large proprietary data give it an edge in building AI security tools as attacks become cheaper and more automated. Marshall believes the recent pullback in CRWD stock makes it an attractive buying opportunity. CRWD stock has declined by over 20% year-to-date.

Apart from these three, Morgan Stanley highlighted SailPoint and SentinelOne among top names. SailPoint is seeing strong demand for AI-focused identity security, with AI offerings making up 17% of new ARR in Q4 and roughly $1B in potential future revenue. Meanwhile, SentinelOne stands out for its kernel-level telemetry and cautious approach to traditional SIEMs, targeting 20% revenue growth in FY27. Marshall has a Buy rating on SAIL, while she has a Hold rating on SentinelOne stock.

Which Is the Best Cybersecurity Stock, According to Analysts?

Using TipRanks’ Stock Comparison Tool, we compared these cybersecurity stocks to see which one offers the highest upside potential based on Wall Street analyst forecasts. Among these stocks, SAIL stock offers highest upside of 65% with a Strong Buy rating from analysts. In contrast, CRWD stock has the lowest upside of 31%.