As we move into 2024, cybersecurity remains a pressing concern, with attacks becoming increasingly sophisticated. According to Wedbush analysts, this could be a promising year for cybersecurity companies like Palo Alto, Zscaler, CrowdStrike, and others. One particular development that highlights the importance of adapting to growing threats is Apple's rollout of new security settings aimed at protecting users from iPhone thefts.
These new security features, expected to be included in a forthcoming software update, will require touch or face recognition to access and modify saved passwords. Additionally, if the phone is outside of recognized locations such as home or work, two sets of biometrics will be needed with an hour delay in between. This update comes in response to recent thefts where criminals accessed personal and financial information simply by having the passcode.
While Apple's solution may not directly impact cybersecurity stocks, there are several other factors in play in 2024 that are likely to drive their performance. According to Wedbush analysts, federal cybersecurity budgets could rise by up to 30% this year. The analysts arrived at this estimate after a series of meetings in Washington where they learned that chief information security officers (CISOs) within the federal government are focused on strategies to combat artificial intelligence-powered attacks. They are also evaluating the effectiveness of cybersecurity providers in defending against increasingly sophisticated threats.
Wedbush analyst Dan Ives points out that the need to protect government agencies from cybersecurity threats has become a top priority within many federal budgets. As a potential game-changer, new SEC rules will require companies to disclose any cybersecurity incidents that are deemed material. This regulation is expected to provide a "major tailwind" for the cybersecurity industry.
Based on their analysis, Wedbush analysts have identified six stocks with outperform ratings that are well-positioned to benefit from these trends: CrowdStrike, CyberArk Software, Palo Alto, Qualys, Tenable, and Zscaler. However, it's not just specialized cybersecurity firms that stand to gain. Larger software players like Microsoft, Oracle, and Cisco can also benefit from increased spending by the Department of Defense.
Overall, the cybersecurity landscape in 2024 presents both challenges and opportunities. With the growing sophistication of attacks and increasing focus on cybersecurity by government organizations, there is a significant demand for innovative and effective solutions. As the year progresses, it will be interesting to see how cybersecurity companies respond and whether they can capitalize on the evolving market.