Cyberattacks are becoming more prevalent, and not just because of the war in Ukraine. Are cybersecurity stock prices booming now? asks Shanna Strauss-Frank in her article for finews.first.
The war in Ukraine is not ending on the ground, it is continuing digitally – cyberwar is raging at the same time. During this period, hacker attacks and the spread of false information increased rapidly. Digitalization opened new opportunities not only for the economy but also for crime. Sooner or later, every company will fall victim to a cyber-attack, warns the IT industry association Bitkom. While the resulting damage amounted to 103 billion euros in 2018/19, the sum almost doubled to 203 billion euros in 2022.
In the third quarter of 2022, global attacks increased by 28 percent year-on-year. On Feb. 27, three days after the official start of the war in Ukraine, Check Point Research reported a 196 percent increase in cyberattacks on Ukraine's military and government sectors.
«However, the tide has turned in recent months»
But it wasn't just war-related attacks that characterized the past year. According to an IBM report, companies that use artificial intelligence and automation to detect potential threats and breaches had a 74-day shorter data breach cycle and saved an average of $3 million more. These trends suggest that the need for cyber defense will become increasingly central to enterprises in the coming years. Like many other technology stocks, cybersecurity stocks saw strong demand and market growth during the early stages of the corona pandemic. With the shift to digital work, concerns about the need for cybersecurity measures have increased.
However, the tide has turned in recent months, with investor expectations not being met, the Federal Reserve hiking the federal funds rate, and companies in the technology sector seeing sales and share price declines. Will this development weaken IT security stocks?
Cybersecurity stocks are part of the growth stock segment, and these are the first to suffer from an interest rate hike. Despite the temporary downturn, they can be interesting from a long-term perspective, as the current weakness creates opportunities to build positions. And when equity markets recover in general, growth stocks can be among the top performers.
«Examples include the hacking attacks during the 2020 U.S. elections»
For example, the global cybersecurity market is expected to reach a value of $266 billion by 2027. But cyberattacks can be expected to become more complex in the coming years. That presents new challenges for implementing security solutions and could hinder market growth.
The future development of the market also depends heavily on political and social tensions. Examples include the hacking attacks during the 2020 U.S. elections and the serious increase in cyberattacks on healthcare in the wake of the pandemic.
For both individuals and organizations, cybersecurity is a growing necessity and adequate security measures are taking on a high priority. Individuals are increasingly using antivirus software or VPNs as a result. Cloud-based services to protect their devices, such as a password manager, are also popular here. Companies, on the other hand, often require more complex security measures.
Shanna Strauss-Frank is the spokesperson of Freedom Finance Europe for Switzerland, an EU-based investment broker whose holding company is listed on Nasdaq.
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