Cybersecurity Stocks are the Most Important Investment for the 21st Century

cybersecurity stocks

COVID-19 has accelerated the digitization of the economy at an unprecedented pace. But extensive networking also brings dangers – for consumers and companies. Hackers continue to attack businesses of all sizes. You may remember the cyberattack on fragrance manufacturer Symrise.

In December, attackers gained access to its IT system and brought its operations to a temporary standstill. For Symrise, the attack was accompanied by bitter sales dips and, of course, a drop in the stock price. As an investor, you must keep cyberattacks on your radar more than ever. We’ll talk about a few of the companies that should be on your radar.

Bitkom Study: Almost All Companies Affected by Cyber Attacks

I’d like to present an interesting study by the digital association Bitkom. The study illustrates the extent of the hacker problem for the global economy. According to Bitkom, almost nine out of ten companies fall victim to data theft, espionage, and sabotage (between 2020 and 2021). The report links this to blackmail incidents combined with the failure of information and production systems and the disruption of operating processes. These are usually so-called ransomware attacks. This blocks computers and other systems until the operator pays a ransom.

According to the study conducted between January and March, this resulted in billions in damages. The amount of damage was recently more than twice as high as in 2018 and 2019, at around 223 billion euros per year.

Extreme Potential in Cybersecurity Stocks

For us investors, this naturally entails risks – but also opportunities. After all, the companies that provide solutions to combat hacker attacks are in demand as never before. According to a study by the data information service “P&S Intelligence,” global cybersecurity stocks are expected to grow to $433 billion by 2030. By comparison, the volume in 2019 was only $120 billion.

Fortinet and Palo Alto Networks – Advanced Firewalls

You can bet on this booming market on individual cybersecurity stocks. Fortinet (NASDAQ:FTNT) and Palo Alto Networks (NYSE:PANW) are certainly among the best known. The groups offer security platforms through which corporate customers can access highly advanced firewalls. In addition, the two cybersecurity specialists sell analysis tools that IT departments can use to identify weak points in the network even before the actual attacks.

Zscaler – The Cloud Protector

Another interesting individual stock is Zscaler (NASDAQ:ZS). The publicly-traded company operates a global network for corporate customers dedicated to improving digital security. Among other things, Zscaler helps its customers migrate data securely to the cloud and shields it from unwanted access via state-of-the-art firewalls.

According to its information, Zscaler is now responsible for securing more than 400 Forbes Global 2000 companies. One prominent customer is Siemens, which uses Zscaler’s Security-as-a-Service solution to secure all the data traffic of its 300,000 employees around the globe.

NortonLifeLock – Security for Private Users

There are also investment opportunities in this space around private customer security. Here, NortonLifeLock (NASDAQ:NLOK) is the leader. Its best-known product is the antivirus software of the same name, which protects around 50 million private computers worldwide from attackers.

A few days ago, Norton announced that it would swallow its competitor Avast for more than eight billion dollars. Together, the two companies are expected to have half a billion users.

The Bottom Line on Cybersecurity Stocks

Companies must adopt comprehensive security for their IT systems. Otherwise, they could lose customer data and investors an untold amount of money. Let’s continue to dig into this trend in the future.

Dr. Gregor Bauer
Dr. Gregor Bauer
Dr. Gregor Bauer credits his trading success to combining fundamental aspects of a trade with expert technical analysis. A Certified Financial Technician from the International Federation of Technical Analysts (IFTA), he’s rated as one of Germany’s top 300 economic experts.
Dr. Gregor Bauer
Dr. Gregor Bauer
Dr. Gregor Bauer credits his trading success to combining fundamental aspects of a trade with expert technical analysis. A Certified Financial Technician from the International Federation of Technical Analysts (IFTA), he’s rated as one of Germany’s top 300 economic experts.

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