These are the six stocks to watch in the red-hot cybersecurity sector – MarketWatch
As with many areas of the economy, enterprise technology spending was hurt by the Covid-19 pandemic. According to consulting firm Gartner, worldwide IT spending declined 3.2% last year to mark a rare rollback in this category.
One important exception was cybersecurity spending, which grew 6.4% in 2020. And this year the segment continues to grow at an above-average rate as Gartner estimates global spending on information security and risk management services will top $150 billion — up 12.4% from last year, and about double the 6.2% growth rate for worldwide IT spending as a whole.
The reason for this extra cash flowing into security should be obvious. From high-profile events, like the second wave of cyberattacks in May from the hackers that targeted SolarWinds to the all-too-familiar warnings we get from our phone or laptop about potential phishing schemes, we are surrounded by cyber risks in 2021. And the problem is not going away.
Many investors have jumped into cybersecurity stocks in recent years to capitalize on this trend. However, it’s important to note that even if the overall pie is growing, there are some companies that have a decidedly bigger piece of that pie — or at least a bigger appetite than the competition.
Here’s a look at a few entrenched stalwarts and a few hungry upstarts to watch in the cybersecurity space, and their outlook for the future in this high-growth area.
Stalwart: CrowdStrike
CrowdStrike Holdings Inc.
CRWD,
-2.68%
is a $60 billion cybersecurity leader that has both size and momentum on its side.
The stock has had a pretty good run over the past year, with shares rising about 90% in the prior 12 months compared with about 30% for the broader S&P 500 Index
SPX,
-0.14%.
That’s in large part because of projections for roughly 60% revenue growth this fiscal year and almost 40% next year despite an already impressive scale.
CrowdStrike is thriving because of its sophisticated Falcon technology, cloud-supported artificial intelligence platform that analyzes information in real time to detect and ultimately prevent cybersecurity attacks. According to internal information, this platform manages trillions of events every week — which in addition to being a staggering amount of crises averted, is also represents a huge amount of raw material to make its platform even smarter.
Admittedly, there’s a lot to like about this stock right now. But it’s hardly alone, as you’ll see from other names on this list. In fact, analysts at Morgan Stanley recently sounded a warning …….