Wedbush Securities analyst Daniel Ives has placed his bets on cybersecurity as the “biggest subsector” in the technology sector in 2025.
What Happened: According to Ives, as the world moves toward using cloud services for storing data, strong cybersecurity services becomes imperative for the protection of data.
“When you look at Crowdstrike, Zscaler, Palo Alto, Check Point, as more moves to the cloud, cybersecurity is going to move hand-in-hand. This is going to be one area that outperforms significantly during earnings season,” Ives told CNBC on Monday.
When highlighted that the cybersecurity ETFs have performed poorly in the near term, Ives quipped that they are going to be one of the best performers of 2025.
“I think it’s because of rotation,” Ives said, highlighting the near-term underperformance. “I think the market’s got it wrong, when you actually look at the technology subsector, cybersecurity could be the biggest subsector of the year for tech,” he added.
Meanwhile, he also expressed his optimism in International Business Machine Corp. (NYSE:IBM), and praised its CEO, Arvind Krishna. “When it comes to AI, I think what Arvind’s doing there is that there’s a renaissance going on in Arkmonk, that’s why we are very bullish on IBM,” he said.
When asked what the investors should look out for in IBM’s earnings, he said, “I think it’s cloud computing and it’s AI-driven revenue. Network services, you could say, is under pressure, but the stack, that’s what IBM is selling into a massive installed base,” added that this was going to get “rerated” as the investors “underestimate” it.
“If there is going to be weakness, that’s going to be from networking players like Cisco and legacy players like Dell.”
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