While some investors are focused on browsing every list of Forex brokers and picking the best option, other investors have different concerns. Cybersecurity stocks are on the rise, and many don’t seem to understand why.
Nowadays, most things are becoming digital. We are spending more time taking advantage of technology and its convenience – which includes speaking to our loved ones on social media, creating video content, or even doing our banking online. Therefore, it is no surprise that there’s been a boost in cybersecurity stocks.
But what exactly caused the sudden explosion? We will see about that soon enough.
Cybersecurity Stock Rise – What Is Causing It?
There are a few reasons behind the growth of cybersecurity stocks, and if you want to begin investing in them, you may be curious as to why they are so popular. Let’s take a look at the factors that led to this boost:
More Awareness Surrounding Cybersecurity
Over the last few years, more people and companies have started being aware of how cyberattacks could affect them and how important it is to protect themselves. Cybersecurity can prevent cyberattacks and ensure your money and funds are safe no matter what. As such, many people have started investing in cybersecurity stocks to stay protected.
As the demand grows, the cybersecurity sector will also boom. As people are learning more and more about computer technology, hackers are way ahead of us. They could hack us before, and now they have even more tools to do that. Whether we like it or not, hackers have always been one step further.
As defenders, we try to catch up to protect ourselves—and as a result, we invest in the next best thing: cybersecurity. We rely on companies coming up with technologies to protect us, using software, hardware, and a fair degree of intelligence to thwart a potential attack.
Businesses also know that these attacks are only getting worse. Cyberattacks have increased by 15.1%, and thanks to the evolution of social media and the Internet, everyone knows about this. As a result, companies are aware that if they don’t show any interest in cybersecurity, they will suffer the consequences.
Worries About More Numerous, Sophisticated Attacks
Lately, a lot of cyberattacks have not only become more complex, but they have also increased in numbers. Attacks are more frequent, and usually, they are worse compared to cyberattacks people used to deal with in the past.
Due to the recent lockdowns, more and more individuals started working from their homes. This increased the risk of cyberattacks occurring; therefore firms had to start looking for solutions.
Part of the rise in cybersecurity stocks has also occurred due to the Russia-Ukraine conflict. After the Russian invasion of Ukraine, analysts anticipated a greater risk of cyberattacks, so more companies started preparing for scenarios like this.
With that in mind, just as the attacks are more sophisticated nowadays, so is the technology used to protect ourselves against this. A common way to counter this is artificial intelligence (AI), as it can spot and watch for a potential attack before it has any chance to cause any real harm.
AI technology has already been popular, with people buying stocks all over the place. When you put it together with cybersecurity, you can see why individuals are becoming more and more interested in this area.
Changes In Work Environment
When you work in a company, on a network protected by numerous firewalls and safe methods, you aren't really concerned about cybersecurity. The company you work for should have secured the firewall, which means there is nothing specific for you to worry about.
However, things started to change in 2020 when the government lockdowns began to wreak havoc. People were pushed into leaving their offices and working from home—therefore, leaving the security of the company networks. As cybersecurity was mainly in the interest of large corporations, the average person wasn't really concerned about these technicalities.
As a result, as more and more individuals were pushed into lockdown, cyber-attackers also saw an opportunity. Precious company data was accessed from the home network, which was not as secure. It led to numerous attacks and data leaks, to the point where it became a great concern.
If people were to return fully to the offices, there would probably not have been any significant changes. However, people are embracing remote work, and there is a good chance this will be the norm even after the lockdowns and restrictions are, hopefully, gone. People started to like the flexibility of working from wherever they want.
This means that the interest in protecting their data will also increase. More and more companies are developing ways to protect data from a home computer. They are looking for methods that can be accessible even to the average person, not just big company owners. And as people want to stay away from cyberattacks, the demand in home computer cybersecurity will boost.
Technology is at a high point nowadays, but this does not mean that it is perfect. People are also aware of the fact that, more than ever, their data is at risk. These days, companies use cloud storage to keep their data, rather than using locked drawers protected by a key. The issue is that while this makes things easier for us, it also makes us more vulnerable.
Malware—such as viruses, Trojans, or worms—has become a significant threat to us. The lockdowns brought a spike in computer viruses, which put all of our accounts and finances in danger. Ransomware has also become a big threat, although the action has not been as publicized.
Increasingly, more individuals are keeping their finances online. They are trading cryptocurrencies, using online banking, and making Internet payments. Some banks such as Revolut provided disposable virtual cards to combat fraud, but this is not the case with every bank.
As a result, more companies, as well as the people conducting online shopping, are upgrading their security measures. The extra funds going into these systems, and the high profits they bring, are two more reasons why cybersecurity stocks are higher than ever.
What Do Investors Think About the Stocks’ Future?
Investors believe that investing in the latest security measures is the best thing they can do. As technology allows cybersecurity to improve, hackers somehow also manage to come up with ways to overcome security measures. They make the attacks stronger, being a constant risk for unsuspecting individuals.
Because of this never-ending cycle, cybersecurity solutions will always be necessary and will be in even higher demand. The technology will also improve, keeping up with every threat that cyber-terrorists have to throw at us. This makes the industry quite a promising one to put your funds in.
Not every cybersecurity stock will be a winner eventually, but we can’t deny that the industry itself is profitable. Investors believe that if you have a diversified portfolio with multiple cybersecurity stocks, you may reduce the associated risks.
Threats from hackers are continuously changing and the world almost never knows what to expect, but people will still continue to use and improve the technology. That, in itself, speaks a lot about the future of this technology.
Will This Rise Be Long-Term or Just Temporary?
Whether this cybersecurity stock rise will be a long-term thing or merely a temporary one is hard to predict. However, given the need for cybersecurity, especially as the world is shifting towards a more digital approach, chances are that it will be a long-term shift.
Despite the Internet posing a risk for cyberattacks and other dangers, people will not want to stop using it. The Internet has become a very convenient way to go around our daily tasks. We no longer have to stay in lines, we can shop for items at the click of a button, and we can do our work from the beach with lemonade in our hands, for all that matters. It is too convenient for us to give it up.
That being said, more cybersecurity measures and solutions will appear. As AI technology is also improving, people will find a way to combat cyber-terrorists without having to lift a finger.
The right code handled by professionals will improve—and once a certain stage is reached, there is no going back to not using said technology. Investors will give their support for this as well, as they know how much we crave technology.