SolarWinds ( SWI Quick Quote SWI - Free Report) depreciated 16.7% on Monday after the network management software maker reported a massive cyberattack. The stock also tumbled after media reports surfaced claiming hackers have gained access to the U.S. Treasury and Commerce department systems through the network management software provided by the company.
In a Dec 14 SEC filing, the firm said that its Orion network monitoring products rolled out between March and June have become victim to a highly sophisticated, manual supply-chain attack. SolarWinds believes its Orion networking monitoring products could have been used to compromise the servers of nearly 18,000 of its customers.
The attack is connected with data breach at
FireEye ( FEYE Quick Quote FEYE - Free Report) . In a Dec 8 blog posted by the company, CEO Kevin Mandia disclosed that attackers have stolen the “Red Team” tools used by its officials for testing customer security.
FireEye believes the attack has been probably carried out by hackers from a foreign adversary, terming it a “highly sophisticated cyber threat actor.” The company couldn’t identify the country it suspects. However, according to various media reports, investigators doubt Russia behind this attack.
FireEye noted that it is working closely with the Federal Bureau of Investigation, and some of its partners, including
Microsoft Corporation ( MSFT Quick Quote MSFT - Free Report) , are conducting an in-depth investigation of the breach.
SolarWinds develops software that helps organizations and government agencies manage their networks, systems, and information technology infrastructure. Although it is a publicly lesser known company in the tech sector, its customer list includes all five branches of the U.S. military, majority of Fortune 500 companies, and top 10 telecommunication services providers in the United States.
The latest data breach has put SolarWinds’ reputation at risk. This can impact its business in the upcoming period as customers might be apprehensive in buying its solutions which couldn’t safeguard the company from hackers.
In its Dec 14 SEC filing, SolarWinds revealed that its Orion products had generated approximately $343 million of revenues in the first nine months of 2020, representing about 45% of total sales.
SolarWinds currently carries a Zacks Rank #3 (Hold). You can see
. the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
A better-ranked stock in the broader technology sector is
NVIDIA Corporation ( NVDA Quick Quote NVDA - Free Report) . The stock currently carries a Zacks Rank of 2 (Buy) and has an expected long-term earnings growth rate of 18.3%. Legal Marijuana: An Investor’s Dream
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