CyberSecurity Stocks – An Overview Of Their Performance And Thoughts On Their Potential Trajectory

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A taunting telegram message from notorious hacking group LAPSUS$ reading, “We are officially back from vacation,” provided the prelude to the exposure of its latest victim, global software giant Globant S.A. GLOB.

The Luxembourg-based operator suffered a cybersecurity breach from LAPSUS$ that resulted in the loss of 70 gigabytes worth of data. The breach showed data bearing the names of a range of global businesses, including Meta Platforms Inc. FB, Deutsche Post AG DPW, BNP Paribas S.A. BNPQY and Apple Inc. AAPL.

Globant acknowledged – but played down – the hack in a press release later the same day, but the confirmation provided puts it on a long list of LAPSUS$’s corporate victims, including Nvidia Corp. NVDA, Samsung Electronics Co. Ltd. (KRX: 005930), Microsoft Corp. MSFT and Vodafone Group plc VOD.

LAPSUS$’s actions are a chilling reminder of the crippling advances in cyberthreat and hacking initiatives that have emerged over the last decade. This rise reached new heights last year. A comprehensive threat report by Blackberry shows that short-message service (SMS) phishing attacks were up 300% in North America and that 70% of small- to medium-sized businesses suffered cyberattacks in 2021.

Cyberattacks have even made it beyond the corporate world and into major political disputes. A report by Harvard Business Review dissects Russia’s cyberattacks on Ukraine and its implications on the future of digital security.

As the threat of cyberattacks looms large, proactive traders and investors may be looking at cybersecurity companies for potential bets on their importance for digital safety. Where should these investors be looking?

Let’s take a look at some history. 

An Overview Of Cybersecurity Stocks

Cybersecurity has enjoyed a miraculous rise in the stock market throughout the last couple of years.

Investing in the First Trust NASDAQ Cybersecurity Exchange Traded Fund (ETF) CIBR at its inception in 2015 would’ve yielded a 180% gain had one sold at its peak last November. A look at the Global X Cybersecurity ETF BUG relays a similar story; early investors in the fund would’ve enjoyed a 122% appreciation in their investment had they sold in November.

After a rough start to 2022, both ETFs look like they may be ready to continue their upward trajectories. Regardless of what happens, however, their rise is indicative of the market’s attention and acknowledgment of rising cybersecurity demand. 

Innovators in this field like CrowdStrike Holdings Inc. CRWD have experienced similarly strong trajectories in their stock prices. Setting a similar time frame to the two above examples, early investors in CRWD would’ve realized a 380% gain on their initial investment. CRWD reached this meteoric rise through its industry-leading cybersecurity solutions, which stop breaches by preventing and responding to all types of attacks – both malware and malware-free. 

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Representing a slightly more startling rise is Booz Allen Hamilton Holding Corp. BAH, a cybersecurity giant whose stock had risen 420% from its initial public offering (IPO) in 2010 through November. Encompassing a slightly larger umbrella of products and services, BAH provides consulting, analytics, digital solutions, engineering and cybersecurity services to public- and private-sector organizations. BAH notes that “a cyberattack happens every 40 seconds” and has spent the last decade dealing with that threat.

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Displaying similar, but less potent, strength than BAH and CRWD, Trend Micro Inc. TMICY stands tall among successful cybersecurity operators within the last decade. From its inception in 2001 to the November peak, the company’s stock price rose nearly 170%. The company spent the last decade developing enterprise security software for servers, containers and cloud computing. Its cloud and virtualization security products provide automated security to VMware, Amazon AWS, Microsoft Azure and Google Cloud.

Will TMICY trend bullish or bearish? Learn more.

Despite turbulent stock market performance, CSP Inc. CSPI is the longest-reigning cybersecurity provider in this cohort, having provided its services since 1968. Despite enjoying cyclical surges in stock price, CSP’s stock has been largely range-bound between the $3.50 to $18 mark for the majority of its lifetime. Outside of its stock chart, the company demonstrates a little more directionality. It won the Best Solution for APT Detection and Response in 2021, for example, and a Cyber Security Excellence Award in 2020. 

What’s Next For Cybersecurity?

While any sort of speculation about stock price comes with its grain – or perhaps, jar – of salt, the necessity of cybersecurity is far less obscure; so long as digital systems are vulnerable to attacks and malicious parties exist, cybersecurity will continue to be a crucial ingredient in the security of governments and corporations everywhere. 

But like all industries, cybersecurity providers will experience their bull and bear markets. For investors – and traders – looking to take advantage of these fluctuations, the VantagePoint AI  forecasts have proven to be up to 87.4% accurate in determining the trend three days in advance.

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This post contains sponsored advertising content. This content is for informational purposes only and not intended to be investing advice.

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