Jim Cramer says this surging cybersecurity is gaining market share and proving doubters wrong

Palo Alto Networks (PANW) defied the doubters with its late Friday quarterly results and strong guidance. It's further proof that the cybersecurity leader is a compelling stock to own, CNBC's Jim Cramer said Monday as shares surged roughly 15%.

"[CEO Nikesh Arora] snookered all those who felt, 'Well, this can't be true,'" Cramer said on "Squawk on the Street," referring to the belief held by some on Wall Street that Palo Alto's unusual decision to report earnings after the market closed on a summer Friday portended bad news. In the nervous run-up to the earnings release, Palo Alto's stock had fallen about 16% in August.

Instead, the cybersecurity provider reported what Cramer dubbed an "outstanding quarter," with fiscal fourth-quarter earnings per share topping estimates and the company's multiyear guidance looking robust. Cramer's Charitable Trust, the portfolio used by the CNBC Investing Club, owns shares of Palo Alto Networks. On Monday, he praised Palo Alto Networks' ability to gain market share in the increasingly important cybersecurity industry.

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The magnitude of Palo Alto's jump Monday is due, in part, to short-sellers covering their bets against the stock, Cramer said. "Those who are short the stock today, they're sending me an invitation to their funeral."

Wall Street analysts have reacted favorably to Palo Alto's presentation.

"The bad news was so fabulous we had 14 price-target increases," Cramer quipped. "It was fantastic," he added. Palo Alto "is winning business from everybody, and it was one of the most impressive, albeit long, conference calls that I've ever been on."

Here's a full list of the stocks in Jim's Charitable Trust, the portfolio used by the CNBC Investing Club.