Gaining nearly 19% in the market, content delivery network specialist Cloudflare (NYSE:NET) is enjoying a second wind of relevance. At the onset of the coronavirus pandemic, Cloudflare’s CDN arm enabled rapid-fire access to critical data, providing a mitigating effect to disrupted businesses. Now, Russia’s decision to invade neighboring Ukraine put a spotlight on the company’s cybersecurity division, bolstering speculative interest in NET stock.
Virtually all circumstances point to a worsening conflict in Eastern Europe, which while posing a humanitarian crisis so happens to lift NET stock and its underlying digital protection products. Primarily, Russian intelligence operatives are well-trained in cyberwarfare, with a long list of breaches to their name. The Kremlin threatened retaliation against countries that attempt to meddle with its “special military operation” in Ukraine, making cyberattacks a likely reprisal. Since this form of nefarious activity is asymmetrical — meaning they can arrive from anywhere at any time — it’s particularly worrying to security experts.
However, as Louis Navellier recently mentioned, Russia isn’t the only country involved in widescale cyberattacks against the U.S. and western countries. “In addition, North Korea has been increasing its hacking efforts, which bring in badly-needed cash.” Just days ago, the country was found to be behind attacks on computers running the Chrome operating system using malware hosted on hacked websites. Among the targets were those in media, cryptocurrency, IT specialists, and financial services.”
Beyond just a matter of national security, cyberattacks can be devastating to private enterprises. Per data compiled by Statista, in 2020, the average cost of U.S.-based businesses impacted by a data breach amounted to $8.64 million. Worse yet, this figure is trending upward. Considering the sharp rise in inflation due largely to the unprecedented expansion of the money stock, cyberattacks will likely increase in scope and scale as a consequence of broader financial desperation.
All of these factors point to another wave of relevance for NET stock. Initially, the onset of Covid-19 saw organizations demand quick access to necessary data. Now, the demand profile has shifted toward the protection of data, an area which Cloudflare also specializes in. In other words, Cloudflare, and NET stock, will definitely remain relevant for both the short and long terms.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
