When it comes to cybersecurity, we appear as sitting ducks, creating big opportunities for cybersecurity stocks.
After all these years, we’re still not prepared for more cyberattacks. That includes the U.S. government, individuals, major corporations, schools, and cities just to name a few. Even as recently as June, a global cyberattack hit the U.S. government agencies.
“Cybercrime is predicted to cost the world $8 trillion USD in 2023,” according to Cybersecurity Ventures. These numbers are under scrutiny and being taken seriously. Other cybersecurity expert publications agree.
“We expect global cybercrime damage costs to grow by 15 percent per year over the next three years, reaching $10.5 trillion USD annually by 2025, up from $3 trillion USD in 2015,” according to Cybercrime Magazine.
With advancements in artificial intelligence, cyberattacks threats consequently increase. They especially surge when we become more dependent upon AI for services such as food delivery, autonomous vehicles, and other services. Therefore, demand for better cybersecurity will soar substantially and could drive these three cybersecurity stocks even higher.
Cybersecurity Stocks: Palo Alto Networks (PANW)
The industry’s 800-lb. gorilla, Palo Alto (NASDAQ:PANW) ran from a low of about $180 to $246 since May. From here, it easily could see higher highs on AI and cloud security issues. Company earnings impressed investors, with revenues up 24% year over year to $1.7 billion. And that was toward the high-end of company guidance for $1.695 billion and $1.725 billion. Billings for the quarter rose 26% year over year to $2.3 billion, which was ahead of the company’s forecast for a range of $2.2 billion and $2.5 billion.
For the quarter ending in July, PANW foresees billings of $3.2 billion to $3.15 billion. The company is forecasting revenue to land between $1.937 billion and $1.967 billion. For the full year, it projects billings of $9.18 billion to $9.23 billion.
And according to the research firm Gartner, enterprise information security spending could reach $186 billion this year and $278 billion by 2027, as noted by Investors’ Business Daily. So, now is a good moment to consider adding PANW to your portfolio.
Zscaler (ZS)
Let’s take a look at another one of the industry’s top cybersecurity stocks. Zscaler (NASDAQ:ZS) exploded from a May low of about $90 to $161.04. It could see higher highs with growing security threats. While the ZS stock pulled back on news Microsoft (NASDAQ:MSFT) added cybersecurity products, that pullback created an opportunity. That rings true especially now when ZS sees plenty of growth ahead.
A few days ago, Bank of America analyst Tai Liani said the risks to companies like ZS are “contained” even with the Microsoft news.
“This is due to the fact that Microsoft’s solution is centered around Office365 and Azure, and though it has the capabilities to support other apps and clouds, it’s missing ‘certain key’ network security components like Browser Isolation, Advanced Threat Analysis, and others, that make this solution currently only suitable for a certain subset of applications,” as noted by Seeking Alpha.
Better, in its most recent earnings report, ZS said revenues soared 46% year over year to $418.8 million. Billings were up 40% year over year to $482.3 million. Its GAAP net loss came in at $46 million, as compared to $101.4 million year over year. For Q4, it expects to see revenue of $429 million to $431 million. For the full year, revenue is projected to come in between $1.591 billion and $1.593 billion.
Palantir Technologies (PLTR)
Not to sound like a broken record, we can look at Palantir Technologies (NASDAQ:PLTR) again. I last spoke about PLTR on July 19 and thought it earns a good place on this list as well.
Why should an investor like PLTR? First, Mizuho analyst Matt Broome recently boosted his price target on the PLTR believing it is “likely well-placed to manage secure AI deployments for its customers,” as noted by MarketWatch.com.
Next, company earnings continue to impress. The company posted revenue of $525 million, up 18% year-over-year, which beat its own guidance range and the Street’s estimate of $506 million.
In addition, the company recently announced a new partnership with SpecterOps, whose BloodHound Enterprise cybersecurity tool can help government agencies respond to attacks. That follows PLTR’s other deal with Carahsoft Technologies to distribute its Apollo platform to state and local governments. With the AI boom set to rocket, PLTR could see increased demand for products, driving greater revenue home.
On the date of publication, Ian Cooper did not hold (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
