4 Hot Cybersecurity Stocks To Buy For A Prosperous 2019

Overall, 2018 has been a good year for the cybersecurity industry, as an alarming number of cyber-attacks and data breaches kept the stocks rallying throughout. Per a Data Breach Industry Summary report by the Identity Theft Resource Center, the number of compromised data by the end of the second quarter of 2018 already crossed the total number of breaches recorded in the whole of 2017. In fact, almost a billion records were leaked globally in just September itself.

A Brief Look Into 2018 Cyber Scenario

Massive data breaches last year reflected the loopholes in the security systems around the world. The attacks continued this year, affecting travel booking company Expedia’s subsidiary, Orbitz (orbitz.com). In May, two of the largest Canadian banks reported a major hacking of personal and financial information of nearly 90,000 of their customers. The following month, Ukraine reported that it successfully warded off another sophisticated cyber-attack against a chlorine distribution plant.

The worrisome trend has not only gravely affected certain companies, but also threatened the national security of some countries. Per the findings of Cisco (NASDAQ:CSCO), hackers have infected more than 500,000 routers and storage devices across 54 nations.

In October this year, Bloomberg Businessweek claimed that Chinese spy chips were present in numerous American corporate giants’ hardware, indicating the seriousness of data breach and sensitive information theft by Chinese hackers.

Another notable security breach that rocked the year was that of Facebook (NASDAQ:FB) , which risked the personal information of almost 50 million users.

Further, earlier this year, a Wall Street Journal report revealed that personal data of 500,000 Google+ users might be at risk, prompting the decision to shut down Google+. A second data breach affecting 52.5 million Google+ users this month added to Alphabet’s (NASDAQ:GOOGL) woes.

How 2019 Might Look Like for the Cyber Security Market

Even though it is difficult to make an exact prediction for the market scenario in 2019, we can paint a general picture based on the current trend and emerging markets, which might have an impact on the cybersecurity market.

With growing use of AI-driven technology to aid industries in their digital transformation journey, the incidents of “smart attacks” are also increasing. In 2019, there is a possibility for cyber criminals to use malicious chatbots to interact with potential victims and manipulate private information out of them.

Moreover, the upcoming year might also see a rise in cyber warfare, given terrorist and cyber espionage groups’ widespread access to advanced technology.

One interesting change, which is expected to take place in 2019, is the shift from network security to identity-based application security. As most enterprises transition to the cloud, traditional control planes are at risk to become obsolete. Current technologies like firewalls and host-based security tools, among others cannot be implemented effectively on the cloud. This might be a setback for cyber security providers. However, tightening of security measures is expected to lead to more advanced attacks, which will ultimately call for more advanced solutions from security providers, thus mitigating the headwind.

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Cyber Security Stocks to Gain From These Trends

While growing cyber-attacks don’t bode well with most organizations, firms operating in the cybersecurity industry are positioned to benefit immensely. Enterprises are realizing the need for stricter security measures, which will push companies to further increase spending on cyber security.

Considering these factors, we’ve highlighted four cybersecurity stocks, which have the potential to make the most of this opportunity. These stocks have a Growth Score of A or B and a Zacks Rank #1 (Strong Buy) or 2 (Buy). Our research shows that the combination offer good investment opportunities.

Qualys, Inc. (NASDAQ:QLYS) is headquartered in Redwood City, CA. The company's solutions are provided through its QualysGuard Cloud Platform, which provides instant visibility to enterprises of their IT assets and global security practices. The company’s new cloud-based security and compliance stack is being received positively by new and existing customers. The stock sports a Zacks Rank #1 and has a Growth Score of B. The Zacks Consensus Estimate for its 2019 earnings has increased 3.4% to $1.85 over the past 60 days.

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Written By: Zacks Investment Research