Wall Street Names 2 Cybersecurity Stocks Poised to Benefit From Post-Quantum Spending

Quantum computing breakthroughs may have taken a backseat as the AI trade continues to fire on all cylinders, but that doesn’t mean the world is oblivious to the threats and opportunities presented by quantum computing. In fact, Q-day — the day a quantum computer can break RSA-2048 encryption — is expected to come as soon as 2028. When that happens, cryptography spending for the new paradigm will go up significantly. BTIG analysts believe the beneficiaries of this development will be the same companies that are already capturing revenue from these opportunities. Fortinet (FTNT) and Cloudflare (NET) are two names that BTIG believes will be among the major beneficiaries of the post-quantum cryptography era.

In other words, the industry could follow the same pattern that other technological developments do. Where many think new entrants will emerge as a result of changing technological paradigms, the incumbents actually take the major share of spending. For Fortinet and Cloudflare, the case could be similar.

Cybersecurity Stock #1: Fortinet (FTNT)

Fortinet offers cybersecurity and network security solutions to businesses around the world. The company’s offerings include secure networking tools, firewalls, cloud security services, AI-based security solutions, and endpoint protection. Fortinet also provides technical support and cybersecurity research services. 

Over the past year, FTNT stock has delivered returns of around 12%, underperforming the S&P 500 ($SPX), which has gained about 26% during the same period. However, 2026 has been a different story so far. Fortinet has already recorded returns of more than 48% year-to-date (YTD), compared to the S&P’s gain of around 9%. 

Fortinet continues to trade at a discount to its historic valuation, which makes BTIG's call even more attractive. FTNT stock’s forward price-to-earnings (P/E) ratio of 43.7 times may look expensive, but it still offers a discount to its five-year average. One reason for this discount is the lackluster earnings consensus, with the company expected to show earnings growth in the mid-teens over the next three years. This could change if Q-day arrives as expected, resulting in increased spending that will directly benefit Fortinet.

The company reported its first-quarter fiscal 2026 earnings on May 6, achieving a record non-GAAP operating margin of 35.8%. Non-GAAP EPS came in at $0.82, rising 41% year-over-year (YOY), while GAAP EPS rose 29% to $0.72. During the quarter, the company repurchased $827 million worth of shares. Free cash flow reached a record $1.01 billion, adding another milestone. On the business side, service billings grew 27%, and deferred revenue increased 15%. 

Fortinet carries a consensus “Hold” rating from 43 Wall Street analysts covering the stock. The mean price target of $106.11 has already been surpassed. However, the highest price target of $130 still implies 10% potential upside from the current levels. 

Cybersecurity Stock #2: Cloudflare (NET)

Based in San Francisco, California, Cloudflare is a cloud company that provides various services to businesses globally. It offers cybersecurity tools to protect against threats like malware, hacking, and DDoS attacks. The company also provides networking and performance solutions, such as load balancing, video streaming support, content delivery, and DNS. 

NET stock has performed broadly in line with the S&P 500 over the last year. The broader index has delivered returns of around 26% while Cloudflare has posted gains of around 28%, slightly outperforming the index. However, performance has weakened so far this year, with NET stock declining by about 2% YTD.

Cloudflare’s earnings outlook looks quite attractive. According to estimates, the firm is expected to grow earnings by 28% in 2026, 27.5% in 2027, 30% in 2028, and 50% in 2029. Yet the stock performance has been underwhelming, due in part to soft Q2 guidance and slowing sequential momentum.

The company posted its Q1 fiscal 2026 results on May 7, reporting revenue of $639.8 million. Non-GAAP operating income for the quarter came in at $73.1 million, with net income of $94 million. At the end of the quarter, Cloudflare had $4.2 billion in cash, cash equivalents, and available-for-sale securities. Gross margin stood at 72.8%, down significantly from 77.1% in Q1 2025 and also missing the 75.1% Wall Street consensus estimate. This short-term headwind continues to suppress the share price. 

According to 33 analysts with coverage, NET stock holds a consensus “Moderate Buy” rating. Based on their estimates, the stock has a mean price target of $238.59, which implies 24% potential upside from current levels. The highest price target of $300 suggests that shares could climb as much as 56% from here.