Adrian Johnson
TLDR:
- Cybersecurity stocks are gaining investor interest due to high profile hacking incidents and the buzz surrounding artificial intelligence.
- Federal government spending on cybersecurity is expected to increase in 2024, providing a boost to the industry.
Investors may find it opportune to consider cybersecurity stocks amidst recent hacking incidents and the growing interest in artificial intelligence. Analysts predict an increase in federal government spending in 2024, which could benefit the cybersecurity sector. The Computer Software-Security group ranks 99 out of 197 industry groups tracked by IBD as of June 7. CrowdStrike stock has performed well, with a 36% increase in value this year, and the company beating first-quarter earnings expectations. Cloud-based cybersecurity platforms like CrowdStrike are seen as potential market share gainers, as companies consolidate their security vendor purchases. Additionally, cybersecurity firms with high Composite Ratings, including CrowdStrike, Palo Alto Networks, and CyberArk, are worth keeping an eye on.
However, not all cybersecurity stocks have had positive results. Palo Alto Networks reported fiscal Q3 results that missed Wall Street targets, while Fortinet and Cloudflare experienced declines in their stock values. Despite competition from cloud computing giants like Microsoft and Google-parent Alphabet, cybersecurity firms continue to thrive. Federal government initiatives, such as the Cyber Incident Reporting Act of 2023, and the increasing threat of ransomware provide tailwinds for the industry. Companies like CrowdStrike, Zscaler, Tenable, Rapid7, and CyberArk offer a range of products and services to address different cybersecurity challenges, from ransomware to phishing attacks.
