The December attacks by Russian hackers on multiple U.S. government sites, including the Treasury and Commerce Departments as well as the Energy Department, which is responsible for managing America’s nuclear weapons, underscored the importance of cybersecurity.
It’s not just government agencies that need to be vigilant against both domestic and foreign cyber attacks. Corporations are increasingly reporting that they too are being attacked by hackers. In December, tech giant Microsoft (NASDAQ:MSFT) reported that it had found malicious software in several of its systems.
That’s not to mention the cyber threats confronting individuals these days — from identity theft to ransomware.
It all adds up to growing demand for cybersecurity companies.
Here are 4 cybersecurity stocks to buy for massive growth:
- Check Point Software Technologies (NASDAQ:CHKP)
- Crowdstrike (NASDAQ:CRWD)
- Cloudflare (NYSE:NET)
- NortonLifeLock (NASDAQ:NLOK)
According to Forrester Research, businesses are expected to spend $12.6 billion on cloud security by 2023, more than double the $5.6 billion spent in 2018. And Morgan Stanley forecasted that nearly $130 billion was spent on global information technology security last year (2020). That’s a lot of room for growth.
Cybersecurity Stocks To Buy: Check Point Software Technologies (CHKP)
Check Point Software Technologies is all in on cybersecurity. This American-Israeli multinational based in Tel Aviv develops software and hardware products that provide network, endpoint, cloud, data and mobile security. This is a company that covers all the bases when it comes to cybersecurity. With 5,000 employees and offices in more than 50 countries, Check Point is focused on combating hackers and cyber criminals wherever they reside.
And since the U.S. cyber attacks in December, several prominent names in the world of investing have been recommending CHKP stock. On Janaury 4, CNBC host Jim Cramer recommended the stock on his popular TV show “Mad Money.” Analysts and pundits have also been upgrading the stock and recommending it in recent weeks.
CHKP stock has risen 54% from its low of $82 a share last March. Today, the company’s share price sits at just over $126. While the stock experienced a rocky autumn along with the broader technology sector, it has enjoyed a healthy 6% bounce since the recent hacker attacks on the U.S. government. The stock could see further upside as more investments are made in cybersecurity protections around the world.
California-based CrowdStrike is one of the biggest, best-known and fastest-growing companies in the cybersecurity space. And the good news for investors is that CRWD stock has been trading at a bit of a discount lately.
After peaking $227.36 a share in late December, Crowdstrike’s stock softened to start the New Year, dropping as much as 12% and threatening to fall below $200 a share. It has since rebounded with the broader market rally following the results of the Georgia Senate run-off election, and now trades just under $220 per share.
Astute investors will want to grab shares of Crowdstrike now before it breaks out and hits new all-time highs. The underlying fundamentals of the company paint a very positive picture. Consider that Crowdstrike has grown its revenues more than 1,100% since 2017 and it’s easy to see that this is a growth stock with momentum behind it.
The company is the market leader in the important cloud-based, endpoint protection segment and has also aggressively expanded into 5G network security, which analysts say is the future.
In the cybersecurity space, Cloudflare continues to defy expectations. This San Francisco-based company is a niche player in the cybersecurity sector, choosing to focus largely on website and Internet security.
Rather than being all things to all customers as its larger competitors are, Cloudflare helps individuals, small businesses and the self-employed protect their websites from outside threats that could shut them down or render pages on their sites inaccessible. While this may seem extremely niche to some investors, Cloudflare’s results have been impressive and so too has its stock performance.
Since the market meltdown of March 2020 NET stock has risen 420%, from just over $15 to nearly $80 a share today. Like other cybersecurity stocks featured in this article, Cloudflare started off 2021 with its stock price falling.
While it has rebounded in recent trading sessions, Cloudflare’s stock is currently 11% below its 52-week high of $88.77 a share and represents good value at its current level. And while the company has carved out a niche position for itself in cybersecurity, it’s worth noting that Cloudflare has more than 25 million customers worldwide and its revenue rose nearly 50% year-over-year in the third quarter of 2020.
Not bad for one of the smaller cybersecurity firms.
Now one for individuals. NortonLifeLock concentrates on protecting consumers from cyber crimes and identity theft. The company, based in Tempe, Arizona, was founded in 1982 at the dawn of the personal computer. Since then, it has established itself as a leader in device security and privacy software.
NortonLifeLock has seen its business rise during the global pandemic as people work and attend school from home and look to protect the personal computers they and their children are using.
In terms of its share price, NLOK stock looks like a bargain at $21.12. The company has struggled to regain its 52-week high of $28.70, mainly due to increased competition and a 3% drop in revenue between 2018 and 2020. However, the stock price has risen nearly 17% since the December cyber attacks on the U.S.
Going forward, the share price should appreciate as demand for its products and services continues to rise. Some are calling for the stock to rise as much as 20%. Bargain hunters rejoice!
On the date of publication, Joel Baglole held a long position in MSFT.
Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.