Crowdstrike (NASDAQ:CRWD) has had a pretty good year, and as the upswing in CRWD stock recently demonstrated, digital threats aren’t just limited to pandemics.
Though digitalization has delivered untold conveniences and efficiencies, the irony is that this technology is also the source of our greatest vulnerabilities. Sure enough, the disruption of the novel coronavirus put this contradictory dynamic on full display.
Over the last several weeks where the worst fears of President Donald Trump are being realized by many – irrespective of political beliefs – perhaps the most egregious is his allegedly close ties with Russian President Vladimir Putin.
In recent days, the American public learned that a Russian spy agency allegedly executed what many experts termed the most successful cyber infiltration of U.S. government and corporate institutions in history.
Trump, Cybersecurity and CRWD Stock
That in itself was extremely alarming, though it did manage to drive up CRWD stock and rivals like Palo Alto Networks (NYSE:PANW) for obvious reasons. But it’s what came next that raised more than a few eyebrows.
In an interview last Friday on The Mark Levin Show, Secretary of State Mike Pompeo declared, “This was a very significant effort, and I think it’s the case that now we can say pretty clearly that it was the Russians that engaged in this activity.”
Pointing the finger at an old eastern adversary, the narrative made sense. Needless to say, the Russians are notorious for their cyber-espionage activities, bolstering the investment thesis for CRWD stock. But President Trump flipped the script – as he’s also notoriously known to do – and blamed the other eastern adversary. In a social media post, the President stated:
The Cyber Hack is far greater in the Fake News Media than in actuality. I have been fully briefed and everything is well under control. Russia, Russia, Russia is the priority chant when anything happens because Lamestream is, for mostly financial reasons, petrified of discussing the possibility that it may be China (it may!). There could also have been a hit on our ridiculous voting machines during the election, which is now obvious that I won big, making it an even more corrupted embarrassment for the USA.
Without evidence, the President deflected blame away from Russia, which is peculiar. Let’s face it – there’s no love lost from the U.S. between either China or Russia. More significantly, he contradicted his own Secretary of State, further cementing criticisms that for Trump, his administration was more a publicity stunt than service to the people of the United States.
However, I’d be remiss not to point out that this provides yet another cynical catalyst for CRWD stock. When you can’t trust your government to protect itself, maybe you can trust a capitalistic entity?
CRWD Stock Benefits from a Wholesale Pivot
Although it’s difficult to quantify the real reason why President-elect Joe Biden won – in comparison a quiet old man to Trump’s pugnacious personality – it’s more than probable that the American electorate voted against Trump rather than for Biden.
Obviously, I’m not breaking any new ground with the above statement. But for those who “directly” voted for Biden, his initiatives on clean energy and combatting climate change must have ranked highly. After all, these are millennial pet projects – with Generation Z in alignment.
Of course, the problem with climate change-related initiatives is that they tend to be partisan issues. However, cybersecurity, particularly cybersecurity against Russian espionage, represents a national security crisis for which all parties can come together.
First, the sector distribution of data breaches during the Trump administration has favored businesses, with the segment gradually experiencing fewer breaches. However, infrastructural data breaches – we’re talking medical/healthcare and government/military segments – have increased since 2017.
Granted, all data breaches are crimes and should be treated as such. However, the infrastructural breaches are worrisome as they are tied to national security and stability. That’s a huge factor in why CRWD stock spiked up in recent days.
Second, some Republicans are getting tired of President Trump’s antics. Far more critically, there is a growing movement within conservative groups to redefine the GOP – and the U.S. – as a firmly white majority.
For more information about the alarming racialization of conservatism, check out Newsweek’s article about the infighting of the Proud Boys. Fair warning: the language cited in the report is incredibly controversial.
But the takeaway here is that cybersecurity is a unifying virtue. Biden can attract rank-and-file politicians worried about Russian encroachment. He can also sway non-racist Republicans who are tired of white nationalism seeping into the GOP. And yes, along the way, the incoming administration will help CRWD stock and the broader cybersecurity industry.
One of the Safer Places to Put Your Money
Recently, I’ve discussed my concerns about the major indices and how the market could be heading toward a correction. If so, then it’s possible that one of the safest places to park your money is in cybersecurity.
It’s not just an enterprise-level concern, although that’s a huge revenue channel. Rather, this is really a matter of national security. Unfortunately, the modern battlefield has become asymmetrical, allowing both state and rogue actors to cause untold disruption.
If a President Biden is going to be successful, he must care at least as deeply about cybersecurity as he does the environment. I think that’s a reasonable bet, which makes CRWD stock a long-term buy.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.