Global spending on information technology (IT) increased in 2020 due to the COVID-19 pandemic, which caused an increase in spending on cybersecurity technology due to the increasing dependence on technologies used in different areas of life. Organizations faced new security challenges as cloud computing and remote work became essential. As a result, the prices of many cybersecurity stocks have skyrocketed, and the demand for next-generation security software in this new digital age is stronger than ever.
High-profile security breaches such as those recently exposed to the Washington Metropolitan Police Department in the United States continue, underscoring the constant need for advanced security services, and the real world, especially sensitive websites, which are constantly feared as organizations IT relax security practices for their data and entities.
According to the Identity Theft Resource Center, data breaches during the first nine months of 2021 actually exceeded those that occurred for the entire 2020, and this trend continued until 2022 with fewer attacks but more people affected. Some estimates also indicate that the number of ransomware attacks (where data is taken hostage or threatened to be leaked unless the victim is paid) has doubled compared to 2020, and overall cybercrime is on the rise at a double rate compared to previous years.
Global cybersecurity spending is expected to exceed $ 150 billion by 2022 and is likely to continue to support a high-growth industry. Cybersecurity stocks are a very important place in the technology industry, so knowing how to invest in them can yield some big returns in the next decade.
Here are some of the key cyber security stocks and funds to learn about in 2022 and beyond:
1. First Trust NASDAQ CEA Cybersecurity ETF
It is an investment fund for those who do not want to choose specific stocks and invest in the sector as a whole. The fund is listed on the Nasdaq market under the symbol CIBR and is considered the largest of its kind with assets under management $ 5 , 3 billion. The fund holds an average of 36 shares in the cyber industry and has returned good returns over the past five years.
2. EFTMG Prime Cybersecurity ETF
This fund, which is listed on the New York Stock Exchange (NYSEMKT: HACK), has an average portfolio of 63 stocks and contains much smaller stocks in the cybersecurity sector. The portfolio has assets under management of $ 2.5 billion and has an estimated cost of 0.6%, making it an affordable choice.
Global X Cybersecurity ETF
A new emerging fund in the world of cloud security under the symbol (NASDAQ: BUG) launched in 2019. The fund manages approximately $ 1 billion in funds and has a cost-to-value ratio of just 0.5% and focuses on 31 major equities. The fund has outperformed its competitors since its inception.
It’s for the boxes
It is recommended to invest in it as a diversified and comprehensive initial solution with a viable return. But if you want to look at some stocks as a long-term view, it is recommended to get acquainted with the giants of this market which are outlined below. Despite their poor current profits due to their many acquisitions, they are the pioneers of what they sell and their ability to reap sales and growth in it has been very large and continuous since their inception.
Another legendary software provider (NASDAQ: FTNT) and one of the largest in sales, the company was able to achieve double-digit growth with excellent profit rates. One such development is the recently announced robust software-backed Internet security product that is being built and deployed together with one of Europe’s leading telecommunications providers Telefónica Tech as a first trial. Fortinet is also the best provider of firewalls, and its best-in-class hardware is generating more and more revenue as many organizations turn to Fortinet for help setting up new data centers and servers.
For investors looking for a good balance between both sales and profitability growth, Fortinet is one of the best securities stocks in the market to hold for the long term.
Palo Alto Networks
From the pre-cloud era (NYSE: PANW) with its deep-rooted specialization in firewalls (devices that protect traffic in and out of physical locations such as offices and data centers) and while its legacy services are still in great demand, the real and new growth lies in new cloud services that The company has managed to break through through a large number of acquisitions of small, skilled and emerging companies in this field.
The company’s highly profitable platform has helped the company to make these acquisitions. As a result, Palo Alto Networks reformulated its security operations and handling and underwent a serious transformation. The company’s management says that its acquisition drive is over for the time being, and that against this background it expects double-digit revenue growth in the coming years.
Although many competitors are rated higher in terms of market capitalization, Palo Alto Networks remains the largest cybersecurity operation by revenue. Now it has moved on to be a leading provider of cloud security while keeping its old business competitive in the cyber security industry. The company’s shares trade at relative value compared to its younger, high-flying competitors in the technology cloud segment.
(NYSE: SE) The company’s initial public offering (IPO) in June raised $ 1.2 billion in cash and valued the company at $ 10 billion, making the SentinelOne IPO the largest ever for a cybersecurity company.
This relatively small company operates a cloud-based endpoint security platform, which puts it in competition with CrowdStrike. Its ability to automatically detect and resolve cyber security threats is well accepted in the market. The company more than doubled its sales in 2020 during the halt of the pandemic.
7. CrowdStrike Holdings
It is listed on the popular Nasdaq market under the symbol (NASDAQ: CRWD). This company provides cloud native software, including endpoint security, which provides protection for devices such as laptops, computers, servers and any other network device. Because it is built on the cloud, this company is well suited to support the current trend of teleworking.
CrowdStrike uses machine learning (a kind of artificial intelligence) to detect security breaches and detect threats. It is also easy to distribute to the millions of people working from home and billions of devices connected to the internet. The company has recently gradually increased the number of modules on its platform to help its customers, and has new integration agreements with other technology companies to make data protection more consistent across its enterprise’s IT infrastructure.
OKTA Corporation (NASDAQ: OKTA) is a leading identity and access management company that has reconsidered traditional security using so-called zero-trust engineering.
This type of identity management constantly requires user authentication before allowing access to data and applications. If old security was a fortress with a wall and a moat, then security based on mistrust behaves like an anti-espionage agency.
In an increasingly mobile and cloud-based world, the demand for Octa identity management software is huge. Companies generally have a complex network of stakeholders, including employees, outside contractors, suppliers, customers, and so on. This is where OCTA’s power lies in managing and verifying the identity of each actor.
Octa is firmly at the forefront of this branch of cyber security. Its modern approach to how security works is gaining many new customers, and the company is expanding its operations to add more to its already impressive customer base such as Zoom, T-Mobile, Hitachi and Nasdaq.
9. Zscaler costume
Another cloud security solutions provider (NASDAQ: ZS) is also working to coordinate endpoint security to keep data operationally secure and its files healthy. The company was able to significantly increase its sales and is also one of the biggest players in this stock segment.
ZSkyler started with software as a service designed to protect cloud computing. However, it is based on the addition of new security services in network security and end-user monitoring products. End-user monitoring is now increasing for more employees working from home and worldwide spending on cloud computing is expected to amount to $ 1 trillion and Zscaler is well positioned to take advantage of this opportunity.
The company’s sales are growing steadily and the company is currently the largest seller of Pure Play Security Vendor cybersecurity solutions and is expected to continue to grow at a rapid pace.