If there’s one theme that I’m known for in recent years, it’s technology. With the framework set for myriad innovations within this decade, astute investors will do well by getting in before the crowd. But with so much of our lives being integrated into the digital space, a growing need has developed to protect our data. That’s where CrowdStrike (NASDAQ:CRWD) comes in and CRWD stock takes front and center stage along with it.
Well before the shift to remote operations brought on by the novel coronavirus, cybersecurity has been leaping in relevance. While the advent of cloud computing and containers have revolutionized the business world, it has also left us vulnerable to online attacks and data breaches. Indeed, cybercrime has grown into a nefarious international enterprise as so few businesses operate without a digital footprint.
According to a CNBC report in October 2019, the average cost of a cyberattack across all business sizes is $200,000. This specific data point comes from insurance carrier Hiscox. But it’s not just the nominal cost. Associated with a data breach comes opportunity cost in terms of recovery efforts and dramatically reduced productivity. All told, 60% of small businesses close up shop within six months of a cyberattack.
It may be a cynical statement, but this unfortunate reality has bolstered the bullish argument for CRWD stock. Additionally, in the pre-pandemic normal, employees found themselves tethered to the office. Unlike previous paradigms, work doesn’t end after you punch out on the clock. Thanks to smart, mobile devices, you’re never too far away from your boss.
But that leaves multiple opportunities for cybercriminals to exploit your data. Hence, CRWD stock has always been relevant. And demand is about to shift into higher gear.
A Profitable New Normal for CRWD Stock
As you undoubtedly know, the novel coronavirus has disrupted almost every facet of our lives. At the start of the crisis, several organizations, from blue-chip names like Facebook (NASDAQ:FB) and Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) to small local businesses told their employees to work from home.
What was once a source of contention between management and employees — is the rank and file really working from home, executives often wondered? — has now found consensus. Social distancing and productivity don’t have to be mutually exclusive. From this consensus came much rejoicing from the worker bees.
But as happy as employees were to skip their daily commute, the playing field for cybercriminals only expanded. Now, nefarious actors don’t necessarily have to compromise a centrally located company’s infrastructure. Instead, they could hack into individual workers’ computers, presumably a much simpler task.
Out of necessity, company managers must seek end-to-end protection to close gaps that may have inadvertently sprouted due to the broader coronavirus response. Because this is one of CrowdStrike’s core specialties, it’s not surprising that CRWD stock is one of the top performers.
However, just because shares have jumped so much this year doesn’t mean that all the bullishness is baked in. Interestingly, a survey conducted by KeeperSecurity.com revealed that two-thirds of small business leaders believe that a cyberattack is unlikely. Of course, that’s crazy talk. It’s also one of the reasons why cybercriminals target this demographic so much.
Now, companies across the spectrum have every incentive to upgrade their security protocols. Beyond addressing remote work vulnerabilities, several organizations may downsize their physical footprint if telecommuting becomes at least semi-permanent. In that case, the extra funds could go to cybersecurity. Naturally, this is an intriguing tailwind for CRWD stock.
A Trend Within a Megatrend
Loyal readers will know that I refer to the coming convergence of technological innovations this decade as the “Roaring 2020s.” Essentially, this period will embody a megatrend — seismic shifts in our society and economy that will fundamentally change our lives.
And within this technological megatrend could be another trend that disrupts our present way of life: white-collar outsourcing.
Over the past few decades, we’ve witnessed the American economic engine transform from a manufacturing powerhouse to an information stalwart. However, this transition wasn’t without controversy as manufacturing jobs were outsourced to developing nations. And no matter how much people complained about this, the harsh reality is that it’s cheaper to make stuff in other parts of the world.
Startlingly, we may see this play out with white-collar jobs. Because let’s face facts — if your work can be done outside the office, it can be done anywhere. And that anywhere does not have to be in the U.S.
Granted, this outsourcing won’t happen overnight. But the coronavirus has at least forced the discussion among management teams. For that reality to work, though, requires enhanced cybersecurity solutions. Here again, CRWD stock is well positioned to take advantage.
Matthew McCall left Wall Street to actually help investors — by getting them into the world’s biggest, most revolutionary trends BEFORE anyone else. Click here to see what Matt has up his sleeve now. As of this writing, Matt did not hold a position in any of the aforementioned securities.