Artificial Intelligence: The Future of Cybersecurity

The digital world is expanding at an unprecedented rate. With billions of smartphones and connected devices, companies increasingly rely on cloud services and remote work. This shift towards technology has brought about an increase in cyberattacks. According to IBM’s 2023 Cost of a Data Breach report, 51% of organizations were planning to increase investments in security as a result of a breach. The average cost of a data breach globally was over $4.45 million, up 15% from three years ago. And that’s just one type of cyberattack.

As attacks become more frequent (and expensive), the need for cybersecurity solutions has amplified, putting the industry in indispensable territory. For investors wanting to go along for the ride, here are three top cybersecurity stocks to buy in February.

1. CrowdStrike
If you were anywhere near the tech world in the past year, you know how unavoidable artificial intelligence (AI) has been. It has gone mainstream recently, but AI has been around for a while. One of the companies that helped usher in AI in its industry is CrowdStrike Holdings (NASDAQ: CRWD). Since 2011, it has been using AI to power its cybersecurity solutions.

CrowdStrike isn’t just a recipient of AI hype; its business results show the company is one of the premier cybersecurity stocks in the industry. It offers different modules that address a broad range of cybersecurity needs, and 63% of its subscription customers use at least five modules. Around 26% use seven or more. Growing subscriptions and a comprehensive ecosystem helped CrowdStrike achieve $3.2 billion in annual recurring revenue (ARR) in its 2023 third quarter (ended Oct. 31), up 35% year over year (YOY). Its operating income surged 81% YOY to $356 million, showing increased profitability, and the margins on that income were also up 9% from two years prior.

CrowdStrike stock isn’t necessarily cheap, but it should be an excellent long-term investment for those who can stomach the volatility likely to come with it.

2. Palo Alto Networks
Another cybersecurity company that has been making waves in the industry is Palo Alto Networks (NYSE: PANW). The company’s firewalls and security platforms use AI to prevent cyberattacks. Palo Alto Networks’ security offerings are designed to protect against known and unknown threats, making it an attractive option for businesses looking to stay ahead of the curve.

Palo Alto Networks’ revenue grew 23% YOY in its 2023 third quarter (ended Oct. 31), reaching $1.3 billion. Its operating income increased 33% YOY to $328 million, and its net income was up 35% YOY to $283 million. The company’s strong financial performance is a testament to its ability to adapt to the evolving cybersecurity landscape.

3. Cisco Systems
Cisco Systems (NASDAQ: CSCO) is a well-established name in the tech industry, but it’s also making strides in cybersecurity. The company’s security solutions use AI to protect against threats and provide visibility into networks. Cisco Systems’ security offerings are designed to be integrated with its other products, making it an attractive option for businesses looking for a comprehensive solution.

Cisco Systems’ security revenue grew 11% YOY in its 2023 fourth quarter (ended Jan. 28), reaching $1.2 billion. Its operating income was up 13% YOY to $3.1 billion, and its net income was up 14% YOY to $2.8 billion. The company’s strong financial performance is a testament to its ability to adapt to the changing tech landscape and meet the growing demand for cybersecurity solutions.

The Future of Cybersecurity
The cybersecurity industry is expected to grow at a compound annual growth rate (CAGR) of 12.4% from 2023 to 2028, according to a report by MarketsandMarkets. This growth is driven by the increasing number of cyberattacks and the need for businesses to protect their digital assets. AI is at the forefront of this growth, as it enables cybersecurity solutions to adapt to new threats and provide real-time protection.

In conclusion, the future of cybersecurity is bright, and AI is at the heart of it. Companies like CrowdStrike, Palo Alto Networks, and Cisco Systems are leading the charge, using AI to provide comprehensive cybersecurity solutions that protect against known and unknown threats. For investors looking to capitalize on this trend, these three stocks are excellent options.

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Quote Lookup

Symbol Last Price Change % Change
CRWD CrowdStrike Holdings, Inc. 329.34 +6.30 +1.95%
CSCO Cisco Systems, Inc. 50.13 +0.18 +0.36%
PANW Palo Alto Networks, Inc. 376.90 +9.88 +2.69%

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This article is about the future of cybersecurity and how AI is playing a crucial role in it. It starts by discussing the increasing number of cyberattacks and the need for businesses to protect their digital assets. It then introduces three top cybersecurity stocks to buy in February: CrowdStrike, Palo Alto Networks, and Cisco Systems. Each stock is analyzed in terms of its financial performance and growth potential. The article concludes by stating that the cybersecurity industry is expected to grow at a CAGR of 12.4% from 2023 to 2028, and AI is at the heart of this growth. The article is recommended for investors looking to capitalize on the trend towards cybersecurity and AI.