The recent ransomware attack on Colonial Pipeline Co. has resurfaced the rising threat that cyber crime poses worlwide. This followed the December 2020 hacking incident at SolarWinds supply chain.
Although heavy reliance on technology by business as well as individuals drove operational efficiency and eased our lives, the same increased vulnerability to cyber offences
Rapid Automation Resulting in More Cyber Raids
This simply underlines the fact that the frequent use of technology is directly proportional to the possibilities of cybercrime. Therefore, the more technology will be leveraged, higher will be the chances of virtual breaches.
Notably, the COVID-19 pandemic further fuelled the incidence of cyber onslaughts as businesses of all sizes are transitioning their operations to various online platforms. Now from working to spending, education to entertainment, and even healthcare and much more went virtual causing high technology percolation in everyday lives. This puts not only businesses but also schools, hospitals and other organizations at the receiving end of online assaults.
While public institutions and large companies have always been the target of hackers, now smaller organizations with lower security standards are reaching their radar.
Further, the advent of 5G will enable other devices to connect to the Internet, thereby expanding the scope for Iot and AI. While AI and IoT will simplify things, it will also aggravate the rate of cyber crime with accessibility of wider options as more and more activity becomes technology reliant. Cyber Attack to Grow by Leaps and Bounds
Cybersecurity Ventures expects global cybercrime costs to grow 15% per year over the next five years, reaching $10.5 trillion, annually, by 2025, up from $3 trillion in 2015.
The United States is already hard-hit by cyber violations. In 2018, an FBI agent said that every American citizen should expect that all their data (personally identifiable information) is stolen and is on the dark web.
Research firm Gartner forecasts that the corporate computer security market will grow more than 10%, on average, annually through 2024, outpacing the 3% growth rate of spending in the information technology department.
Thus, demand for cyber security-related services and products is bound to shoot up. Companies providing these solutions are therefore good enough to be retained for your investment portfolio.
3 Stocks to Watch
Each of the below-mentioned stocks currently carries a Zacks Rank #3 (Hold). You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Zscaler Inc. ( ZS Quick Quote ZS - Free Report) offers a full range of enterprise network security services. . COVID-19 buoyed demand for the company’s products and services. Growing adoption of Software-Defined Wide Area Network (SD-WAN) solutions could be a key driver for Zscaler over the long run as it is one of the few vendors that offers this solution.
Its acquisitions of Edgewise and the cloud security posture management named Cloudneeti bode well for the long haul.
Zscaler’s inherent strength reflected by a strong balance sheet with ample liquidity position and less debt obligations will help it achieve long-term growth.
The company is recognized as the only Leader in the Gartner Magic Quadrant for Secure Web Gateways (December 2020).
Fortinet Inc. ( FTNT Quick Quote FTNT - Free Report) solutions provide multiple levels of security protection. Demand for the company’s products, such as firewall, virtual private networking (VPN), antivirus, intrusion prevention (IP), web filtering, anti-spam and wide area network (WAN) acceleration gained momentum in the pandemic era.
Per IDC, in terms of revenues, Fortinet ranks third in Unified Threat Management and is one of the fastest growing segments in Network Security.
The company’s focus on enhancing its UTM portfolio will increase its market share and maintain its leadership position.
Also the growing uptake of Software-Defined Wide Area Network (SD-WAN) solutions could be a key catalyst for Fortinet in the long run.
The buyouts of AccelOps, Meru Networks, Coyote Point, XDN, ZoneFox and Bradford Networks will drive long-term growth.
Fortinet’s huge customer base of more than 450,000 helps it upsell products within its installed user base. It is currently focusing on selling more subscription-based services, which will generate stable revenues and boost its margins as well.
Its strong balance sheet with ample liquidity position and no debt obligations is very impressive, which in turn, will support business growth.
Qualys, Inc. ( QLYS Quick Quote QLYS - Free Report) is an industry leaders in the field of Vulnerability Management (VM), one of the key strategies applied to protect businesses from cyber intrusions.
The company’s revenue growth is not as encouraging as its peers, which is one of the primary reasons for investors’ indifference toward its stock. Its weak guidance for 2021 also makes investors wary. But we believe, the company’s divergence outside the VM domain into areas like Security Analytics and Orchestration (SOAR), Endpoint Security, IT Asset Management, Compliance and Web Application Security should hold great prospects.
Apart from enhancing its product and service portfolio, and diversifying revenues, the aforementioned strategy will provide the company with cross-selling and up-selling opportunities.
Without any doubt, the cybersecurity industry shows a sharp uptrend. Riding this wave will therefore fetch strong returns for your investment portfolio.
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