Cybersecurity Stocks Are Entering a “Golden Age” in 2022


Just two weeks ago, I issued brand-new Buy Alerts on a pair of cybersecurity stocks in my investment research advisory Innovation Investor. I told subscribers that thanks to the emergence of a “Golden Age” for the cybersecurity industry, these two were set to soar in 2022.

And since then, cybersecurity stocks have soared indeed. One is up nearly 30%. The other is up 23%. Those gains happened in just two weeks!

A graph showing the increase in price of two cybersecurity stocks

I’m not telling you this to brag but, rather, to give you an opportunity.

The reality is that the party is just getting started in cybersecurity stocks. This industry is entering a “Golden Age” in 2022. Cybersecurity spending is going to accelerate to unprecedented, high levels – and cybersecurity stocks are going to climb to new heights.

Two weeks ago, I put my subscribers in a position to profit off this Cybersecurity Golden Age. And, already, they are profiting in a big way.

But if you missed out, worry not. This rally has legs.

You still have an opportunity to buy these stocks at huge discounts – before they soar 100%-plus over the coming months.

Here’s why.

Modern Warfare is Cyberwarfare

The Russo-Ukrainian crisis has emphasized many things about the world. It’s highlighted the need for energy independence, the importance of sanctions, and the fact that Vladimir Putin is an absolute madman.

It’s also emphasized that modern warfare is cyberwarfare.

That is, modern warfare isn’t exclusively fought on battlefields between people. It’s also fought digitally in the cloud between computers. Indeed, the Russo-Ukrainian conflict has been characterized by relentless cyberwarfare.

Within just the first week of the war, A group under the pseudonym Anonymous has hacked into one of Vladimir Putin’s yachts, Russian State Media, Russian internet service providers and TV networks, various EV chargers in Russia, Belarusian banks and railways and more. They’ve done things from leaking critical information to providing intel and playing the Ukrainian national anthem on state-owned TV stations in Russia. Not to be outdone, Russia struck back, hacking into Ukrainian cameras and taking certain Ukrainian websites offline.

That was all in the first week alone!

And the cyberattacks have not relented since. Indeed, they will likely only get worse. Just two days ago, President Joe Biden told U.S. companies that he expects Russia to conduct malicious cyberattacks against the States and its companies, citing that “It’s part of Russia’s playbook.”

In that same speech, he advised U.S. corporations to strengthen their cybersecurity practices in 2022.

An image depicting a soldier interacting with a holographic interface, cyberwarfare
Source: Shutterstock

The Cyber War has begun.

Of course, the result of this 2022 Cyberwar between Russia and the U.S. will result in a cybersecurity spending surge. The U.S. government, its intelligence agencies and businesses across the country will vastly increase expenditure in the sector over the next 12 months.

Amid that surge, cybersecurity stocks should skyrocket. And that’s why our Innovation Investor has backed up the truck on cybersecurity stocks.

Cybersecurity Stocks’ Huge Long-Term Upside Potential

As many of you know, I’m not a short-term trader. I’m a long-term investor. And as such, I only get into stocks if they have enormous long-term potential in addition to near-term catalysts.

Well, as it turns out, cybersecurity stocks have enormous long-term potential, too.

According to Gartner, worldwide spending on cybersecurity solutions has grown by ~9% per year since 2014. While that may not seem that impressive, simply consider three things:

  1. Cybersecurity spending constituted just 3.5% of IT budgets in 2021, a rather small portion, which implies huge room for share-of-budget expansion in the coming years.
  2. Cybersecurity spending growth has consistently accelerated over the past few years, as the need for cybersecurity solutions has become increasingly mission critical. Expenditure grew just 5% in 2015. In 2021, it grew by more than 12% and is expected to grow another 12% in 2022.
  3. The importance of cybersecurity solutions will continue to rise as we move into an increasingly digital-centric society. And amid this shift, cybersecurity spending growth should also continue to accelerate.

For those reasons, our analysis suggests that we are in the first few innings of a multi-decade breakout in the cybersecurity industry.

We believe that spending will grow to roughly 6% of IT budgets by 2030. It’ll reach 8% of IT budgets by 2040, powering what we see as 11% annualized growth throughout the 2020s — and 8% growth through the 2030s.

A chart depicting the projected growth in global cybersecurity spending

In other words, this industry is just getting started. This isn’t about cybersecurity stocks having a Golden Year in 2022. It’s about these stocks benefitting from a Golden Age throughout the 2020s.

The Bull Thesis for Cybersecurity Stocks

You shouldn’t look at cybersecurity stocks as great stocks to buy now and sell in a few months for a 20% or 30% profit. Indeed, we’re already up 30% on some of our cybersecurity positions in just two weeks. And we aren’t selling because we see these stocks doubling, tripling and even quadrupling over the next few years.

We buy stocks in the early stages of enormous growth, targeting multi-hundred-percent returns over a multi-year window.

Cybersecurity stocks fit that billing perfectly.

Two weeks ago, we told folks that the market crash was creating a huge opportunity in cybersecurity stocks. Those stocks were falling while their underlying fundamentals were improving.

Since then, the ETFMG Prime Cyber Security ETF (NYSEARCA:HACK) has risen about 5%. And our top cybersecurity stock picks have popped more than 20%.

A graph depicting the rise in HACK stock price

Now we’re reiterating our bullish stance on these stocks.

The Final Word

Markets are rebounding, and it looks like this rebound has legs. Cybersecurity stocks are still beaten-up, and their fundamentals just keep improving. Therefore, over the next few weeks and months, we think cybersecurity stocks could rattle off some massive gains.

Perhaps more importantly, we believe this whole industry is about to enter a Golden Age that will last for years. And during this time, we expect high-quality cybersecurity stocks to rise much more than 100%.

That’s why, in our advisory Innovation Investor, we didn’t just issue new cybersecurity stock Buy Alerts. We published a full research report on the entire cybersecurity industry. It includes a discussion of the key players and trends in the industry, as well as our favorite stocks to buy to play this Golden Age.

Trust me. This is a report you can’t afford to miss. These stocks could help supercharge and safeguard your portfolio amid this volatile market.

Gain access to the report and tap into the hottest stocks on Wall Street.

On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.

Article printed from InvestorPlace Media,

©2024 InvestorPlace Media, LLC