How Can I Invest In The Cybersecurity Industry? – Spending on Internet security has increased since the outbreak of Covid-19. Organizations are facing new security challenges as cloud and remote services become more important. As a result, many cybersecurity stocks are top performers in 2020 and 2021, which is the demand for next-generation security software.
A bear market in 2022 shuts down some top-flight stocks, but cybersecurity remains a key investment issue for 2023 and the decade ahead.
How Can I Invest In The Cybersecurity Industry?
According to Theft Resource Center, the number of data breaches in 2021 set a new record, with the number of incidents increasing 68% from 2020 and 23% from the previous peak in 2017. The number of data breaches is close to this. The peak is in 2022, but the number of affected people will increase by almost 42% per year in 2022.
Why Investing In Cybersecurity Makes Sense Right Now
It shouldn’t surprise you that global spending on cyber security is expected to exceed $200 billion in 2023 (almost 12% from 2022) and will continue to grow for years to come, according to IDC research. Cyber security stocksare red hot in the tech industry, so knowing how to invest in them can bring big returns over the next decade.
One of the largest cyber security companies by market value and revenue, and a leader in endpoint security software.
As cloud computing has rapidly grown into a multi-billion dollar industry, sales of cloud-based security products (both on-premises and for the cloud) have skyrocketed. Leaders in this space have the best long-term prospects:
Cloud software company CrowdStrike Holdings (CRWD -3.1%) provides endpoint protection — protecting devices like laptops, PCs, and smartphones, and other devices connected to networks. Because it is cloud-based, CrowdStrike is well suited for supporting remote operations.
Balancing Complexity And Simplicity In Cybersecurity
CrowdStrike software uses machine learning (a form of artificial intelligence) to detect security breaches and hunt down threats. It is also easy to include millions of people who work from home and billions of devices connected to the Internet. The company continues to expand the number of modules on its platform to help its customers, and it has entered into new agreements with other technology companies to ensure consistent data protection across the company’s IT infrastructure.
Low-cost products have declined significantly in 2022, but CrowdStrike’s market is still growing. It is also very profitable measured by zero investment. In a mobile world where more and more devices are coming online all the time, CrowdStrike is poised to continue to grow at a rapid pace.
Another black security vendor, Zscaler (ZS -3.2%), is partnering with end-to-end security services to help protect data. The company is growing its market at a fast pace and is one of the purest cybersecurity stocks as measured by the market rate – although the stock itself is 65% sold in 2022.
Zscaler started with service products designed for network security in the modern cloud computing era, but has added new Internet security and end-user monitoring products. The view of extreme users is increasing because more and more people are now working from home. With global spending on cloud computing expected to exceed $1 trillion annually this decade, Zscaler is well positioned to benefit from broader global growth trends.
Israeli Cyber Security Industry Continued To Grow In 2021: Record Of $8.8 Billion Raised
Okta (OKTA -2.29%) is a pioneer of identity and access management, rethinking traditional security with a trustless architecture. This type of identity management requires user authentication before granting access to data and applications. If the security of the heritage is a fortress with walls and a moat, then the security of the free trust works as a counter agency.
In an increasingly mobile and cloud world, Okta’s identity management software is in high demand. Businesses often have a complex web of stakeholders, including employees, third-party contractors, suppliers, and customers. The number and complexity of web applications has fueled Okta’s development story and attracted some attention. Private equity firm Thoma Bravo acquired three identity and access management companies in 2022: ForgeRock, SailPoint, and Ping Identity.
Okta is a leader in this security field. However, a cyber attack in January 2022 affected two of its customers, further reducing its stock during the bear market. However, Okta is still in growth mode as new customers use its software to manage identity access and security.
SentinelOne (S -3.19%) is a clean internet security company that recently went public. Its initial public offering (IPO) in June 2021 raised $1.2 billion and valued the company at $10 billion, making SentinelOne’s IPO the largest for the cybersecurity industry. However, tough times for the stock market in 2022 and declining earnings sent SentinelOne’s stock below its IPO price.
Ways To Strengthen Your Cybersecurity Posture Right Now
Despite the decline, the small company has doubled its sales in 2022. It is expected to grow another 50% in sales in 2023. Due to its rapid growth, SentinelOne is continuing to convert. Advantages It runs a cloud endpoint security service, which puts it in competition with CrowdStrike. Its ability to identify and resolve cyber threats is widely recognized in the market.
Originally from the era before cloud technology, Palo Alto Networks’ (NYSE: PANW) expertise is rooted in firewalls – devices that protect traffic and internal physical spaces such as offices and data centers. While its legacy services are still in high demand, the real growth is in the cloud.
The company’s highly profitable platform has helped it get more than a dozen small businesses from the cloud over the past few years. Therefore, Palo Alto Networks has improved its security services. Forecasting double-digit percentage growth over the next few years for next-generation security solutions for the cloud era. This growth continues and the market leader has helped make his product one of the best practices among the Internet security industry in 2022, and 2023 seems to be the trend.
Palo Alto Networks is the purest Internet security services game by revenue and market share. Now also a cloud security provider, this legacy business is very competitive in the cyber security industry. Those stocks are trading for a pittance compared to their low-flying, cloud peers. The company also completed a 3-for-1 stock split in September 2022.
Cybersecurity Mesh Market
Another legacy security software provider, Fortinet (FTNT -1.32%) remains one of the world’s largest cybersecurity companies by revenue and market share. Like its peer network Palo Alto, it has continued to grow two percent and is very profitable. But, unlike the purchase of Palo Alto Networks, Fortinet invested in the organic growth of cloud security to stay competitive.
One of its developments is a software-based internet security product developed and used by Telefonica (TEF 0.0%), one of Europe’s leading telecommunications providers. The company recently announced a partnership with Singapore’s Quantum Engineering Project to develop next-generation security for quantum computing.
Fortinet is also a firewall provider. Best-in-class software continues to generate revenue as organizations turn to Fortinet for help when building new data center and 5G mobile networks. It also completed a stock split in 2022, resulting in a 5-for-1 split in June 2022. For investors looking for a good balance of both sales and profits, Fortinet is one of the best security stocks on the market.
As a high-growth segment of the technology industry, cybersecurity offers significant upside for investors over the next decade.
Impressive Cybersecurity Statistics: 2023 Data & Market Analysis
Cloud computing creates, uses and stores more digital data, and an organization’s IT infrastructure can easily become overwhelmed by large orders. The companies that help manage these cloud-based services are just as important to Internet security as the companies that manage the web content and applications themselves. Here are some of the best names to consider:
A longtime leader in data analysis, Splunk (SPLK 0.13%) provides software that helps companies search through data logs, monitor digital operations and coordinate responses to data breaches. Although its platform predates cloud technology, the company is delivering its new cloud-based software to customers.
Data collection is a rapidly growing area of IT management, and Splunk is a critical component of many organizations’ security and monitoring efforts. The company expects its annual revenue to grow at a double-digit rate over the next few years.
However, Splunk has many competitors, some of whom have newer and more sophisticated software for today’s cloud computing needs. But, with the transition to cloud technology still in progress, Splunk is a valuable stock by some metrics, especially when you consider the company’s fundamentals such as revenue growth. A new president took office in the summer of 2022 – Gary Steele, founder and former CEO of Proofpoint (also received by Thoma Bravo in 2021).
Top Cybersecurity Vcs To Watch In 2023
Datadog (DDOG -0.34%), a cloud computing platform, is built to collect, analyze and create insights about data and cloud performance. Companies use AI to help manage large and complex data tracking systems, reducing some of the burden on busy IT teams. It is constantly expanding the capabilities of its platform with new modules that include cloud storage.