Apple Encryption Fight Has Investors Eyeing These Cybersecurity Stocks

Apple’s clash with the UK government over access to encrypted iCloud backups has pushed data privacy and cybersecurity back into the spotlight for investors. As regulators press harder on encryption and cross border data rules, some cybersecurity stocks exposed to this news look better placed than others. This article focuses on three stocks from a Cybersecurity Stocks screener that appear positively exposed to the current debate around privacy standards and regulatory scrutiny. You will see how each stock connects to the Apple encryption story, and what that might mean for risk and opportunity in your portfolio.

Tenable Holdings (TENB)

Overview: Tenable Holdings provides cyber exposure management platforms that help organisations find, measure, and reduce security risks across cloud, IT, operational technology, identity systems, AI workloads, and web applications. Its tools like Tenable One, Tenable Vulnerability Management, and Nessus are used to scan for weaknesses, monitor complex networks, and prioritise fixes before attackers can exploit them.

Operations: Tenable generates about US$1.0b in revenue, primarily from Security Software & Services.

Market Cap: US$3.6b

Tenable Holdings sits right in the middle of the Apple encryption debate because its core business is helping customers understand where sensitive data and systems are exposed. The company now has FedRAMP High status for Tenable One Cloud Exposure, rising adoption of its unified Tenable One platform, and growing AI features such as Hexa AI and agentic workflows. These developments reflect a strong focus on complex, regulated environments. At the same time, investors need to weigh reliance on government contracts, rising R&D and acquisition spend, and the risk that larger vendors bundle similar tools. For anyone tracking how privacy regulation, AI security and cloud risk are converging, Tenable is a stock that may warrant closer attention.

Tenable’s growing role in securing AI-heavy, regulated systems could be the real story here, not just FedRAMP headlines. See how the 4 key rewards and 1 important warning sign might reveal what the market has missed

Digi International (DGII)

Overview: Digi International connects mission-critical devices to the internet, supplying routers, wireless modules, embedded systems, and cloud software that keep industrial, retail, healthcare, and logistics networks securely online and remotely managed.

Operations: Digi International generates about US$475.1m in revenue, with roughly US$342.3m from IoT Products & Services and US$132.8m from IoT Solutions, and most sales coming from North America.

Market Cap: US$2.6b

Digi International sits at the intersection of rising privacy concerns and the push for always connected devices, which is why the Apple encryption headlines matter. Its secure routers, embedded modules, and cloud tools such as Digi Remote Manager and new AI agent DANI are designed for sectors where a network failure or data breach has real world consequences, from smart factories to food safety. At the same time, the stock trades on a high P/E, earnings growth is expected to do much of the heavy lifting, and there has been insider selling and reliance on external borrowing. For investors who focus on secure connectivity as a long term theme, the full risk reward profile of Digi may warrant a closer look.

Digi International’s secure connectivity story and high P/E raise a simple question: Is the market correctly weighing earnings power against funding and insider signals or missing something crucial in the 2 key rewards and 1 important warning sign

Megaport (ASX:MP1)

Overview: Megaport (ASX:MP1) runs a global Software Defined Network that lets customers quickly connect their private networks to major cloud providers, data centers, and internet services, giving them flexible, on demand capacity instead of fixed telecom contracts. Its platform supports hybrid and multi cloud setups, global connectivity, and value added services such as virtual hubs and security hosting.

Operations: Megaport generates about A$255.2m in revenue, with roughly A$150.1m from The Americas, A$63.6m from Asia Pacific, and A$41.5m from Europe.

Market Cap: A$4.2b

Megaport stands out in the Cybersecurity Stocks screener because secure connectivity is built into the product, not just added on top. As regulators question how companies like Apple manage encrypted data, Megaport’s private links between clouds, storage, and data centers can help large customers keep sensitive traffic off the public internet and under tighter control. The stock trades on a rich P/S multiple and has relied on sizeable equity raising. For investors, the key consideration is whether Megaport’s push into AI ready connectivity and storage can justify that valuation, while competition, capital intensity, and governance quality remain live risks.

Megaport’s rich P/S and AI ready pitch suggest that investors may be missing how pricing power and capital needs fit together. Get the full story in the analyst forecasts for Megaport that highlights one crucial pressure point.

The three cybersecurity stocks covered here are only the starting point. The full Cybersecurity Stocks screener highlights 33 more companies that each carry their own compelling privacy, AI security, and regulatory narratives. Use Simply Wall St to identify and analyze the specific catalysts that matter to you, so you can filter this wider set of cybersecurity stocks down to the highest conviction ideas for your watchlist.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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