As the cybersecurity landscape becomes increasingly intricate and fraught with challenges, it is imperative for businesses to proactively monitor and adapt to evolving trends in cybersecurity. According to industry leaders, pivotal changes by 2025, such as the integration of artificial intelligence in threat detection and advances in post-quantum encryption, are set to reshape the cybersecurity arena. A report by Splashtop highlights a transformative shift towards a Zero-Trust framework, which emphasizes the necessity of continuous verification processes and the principle of least privilege to bolster overall network security.
The Global X Cybersecurity ETF has experienced a remarkable surge of over 20% in the past year. This unexpected rally is attributed primarily to the rapid adoption of AI technologies across various sectors, leading market analysts to underscore the critical importance of cybersecurity. The swift integration of Generative AI into the operations of numerous companies has correspondingly resulted in a surge of cyberattacks, intensifying the demand for robust cybersecurity solutions offered by leading firms in the industry.
According to Fortune Business Insights, the global cybersecurity market size was valued at a substantial US$172.24 billion in 2023. Expectations indicate that this market will expand to USD 193.73 billion by 2024 and are projected to reach an astonishing USD 562.72 billion by 2032, reflecting a compound annual growth rate (CAGR) of 14.3%. Notably, the cybersecurity sector in the United States is anticipated to witness significant growth, with estimates projecting a market value of US$166.73 billion by 2032. This growth is largely driven by the increasing proliferation of e-commerce platforms and the strong adoption of enterprise security solutions across manufacturing, banking, finance, insurance (BFSI), and healthcare sectors, further fueling the expansion of the market up to 2032.
As reported by EIN Presswire, the rapid proliferation of the Internet of Things (IoT) presents a substantial growth opportunity for the larger cybersecurity market. With IoT devices, spanning from smart home appliances to industrial sensors, becoming essential components of business operations, there is a corresponding rise in the demand for effective cybersecurity measures. Many of these devices are often equipped with insufficient security protocols, resulting in vulnerabilities to hacking, unauthorized access, and exploitation.
Next Generation Firewalls (NGFWs) are designed to guard against sophisticated tactics employed by attackers using AI to circumvent traditional security measures, as stated by Juniper Research. The research highlights that the network layer stands out as the most critical aspect of IoT networks requiring protection, predicting that over 45% of global cybersecurity spending will be directed towards securing this invaluable layer by 2025.
To compile the list of the 12 Most Undervalued Cybersecurity Stocks to Buy According to Hedge Funds, extensive reviews of multiple online rankings were conducted, along with an analysis of cybersecurity-focused ETFs, including the First Trust NASDAQ Cybersecurity ETF and the Amplify Cybersecurity ETF. After narrowing down an initial list of 25 to 30 stocks, only those trading below the forward P/E ratio of approximately 20.0x, as of November 20, were retained for further examination. The stocks were subsequently ranked in ascending order based on the sentiment of hedge funds, according to Q3 2024 data.
At Insider Monkey, we maintain a keen interest in identifying stocks that garner significant hedge fund investment. Our research demonstrates that mirroring the top stock picks of leading hedge funds can yield superior market performance. Our quarterly newsletter adopts a strategy of selecting 14 small and large-cap stocks every quarter, resulting in an impressive 275% return since May 2014, significantly outperforming its benchmark by a remarkable 150 percentage points (see more details here).
Forward P/E as of November 20: ~13.4x
Number of Hedge Fund Holders: 30
Akamai Technologies, Inc. (NASDAQ:AKAM) is a prominent cybersecurity and cloud computing company, expertly powering and safeguarding business operations online.
Market analysts express upbeat sentiments regarding Akamai Technologies, Inc.’s (NASDAQ:AKAM) strategic acquisition of Noname Security, an API security firm. This move underlines Akamai’s commitment to augmenting its security and compute capabilities, aiming to adapt to the surging demand for comprehensive API protection.
The Noname acquisition is poised to considerably enhance Akamai’s capacity to meet the growing needs and expectations of customers, especially as API usage continues to escalate. Moreover, this strategic integration will empower Akamai to extend its protective measures across various API traffic locations, accommodating diverse business integration and deployment requirements that their clientele may have. Additionally, the acquisition is expected to bolster Akamai’s market position, leveraging Noname’s established sales and marketing resources, along with its well-developed channel and alliance relationships.
Tigress Financial has reaffirmed a “Strong Buy” rating for Akamai Technologies, setting an ambitious target price of $140.00 on August 29. Diamond Hill Capital shared insights in its fourth-quarter 2023 investor letter, noting:
“Akamai Technologies, Inc. (NASDAQ:AKAM) is a legacy content delivery network (CDN) solutions provider. However, the shift towards enterprise and network security as well as distributed cloud computing is evident. These sectors are highly competitive, and Akamai must demonstrate its capability to differentiate itself from larger cloud providers and leading security firms.”
Overall, Akamai Technologies, Inc. ranks 5th on our list of the most undervalued cybersecurity stocks favored by hedge funds. While we recognize AKAM’s investment potential, our conviction lies in the belief that some exceptionally undervalued AI stocks present more promising opportunities for higher returns within a shorter time frame. Interested investors seeking compelling opportunities could explore our insights into the cheapest AI stock.
What are the key cybersecurity trends businesses should monitor as we approach 2025?
**Interview: Insights on Cybersecurity Trends and Investments**
**Host:** Welcome to our special segment on cybersecurity trends and investments. Today, we’re joined by Alex Johnson, a cybersecurity analyst and investment strategist. Alex, great to have you here!
**Alex:** Thank you for having me! It’s a pleasure to be here.
**Host:** Let’s dive right in. The cybersecurity landscape is rapidly evolving, particularly with the increase in AI technologies. What key trends should businesses be aware of as we approach 2025?
**Alex:** That’s a crucial question. One of the most significant trends is the integration of artificial intelligence in threat detection. AI can analyze vast amounts of data much faster than humans, enabling quicker identification of potential threats. Additionally, we’re seeing a shift toward a Zero-Trust framework, which is all about continuous verification and minimizing access privileges. This paradigm shift presents a robust approach to securing networks, especially as cyberattacks become more sophisticated.
**Host:** Speaking of cyberattacks, there seems to be a growing demand for cybersecurity solutions across various sectors. Can you elaborate on how the rise of the Internet of Things (IoT) is impacting cybersecurity?
**Alex:** Absolutely. As more IoT devices are integrated into both business and personal environments, they present new vulnerabilities. Many IoT devices lack robust security measures, making them prime targets for attackers. This has triggered a surge in demand for effective cybersecurity protocols specifically designed to protect these devices. Companies must invest in technologies like Next Generation Firewalls (NGFWs) that utilize advanced tactics to combat threats powered by AI.
**Host:** That’s fascinating. Shifting gears to investments, I recently read about the rising profits in the cybersecurity market, expected to expand significantly in the next decade. Can you give us some insight into the investment opportunities in this sector?
**Alex:** Certainly! The cybersecurity market was valued at over $172 billion this year and is projected to grow at a compound annual growth rate (CAGR) of 14.3%. This growth is being driven by the increased demand for cybersecurity solutions across industries, especially as we see a rise in digital e-commerce and remote workforces. For investors, focusing on undervalued stocks in this space, particularly those favored by hedge funds, can yield substantial returns.
**Host:** It’s interesting to note that certain stocks, like Akamai Technologies, have been highlighted in recent analyses. What can you tell us about Akamai’s recent acquisition and its implications?
**Alex:** Akamai’s acquisition of Noname Security is a strategic move aimed at enhancing its API security capabilities, particularly as API usage grows. By integrating Noname’s expertise in API protection, Akamai can extend its security measures across various traffic locations, thereby better serving its clients. Such acquisitions often create synergies that lead to robust market positioning, which is precisely what we are witnessing with Akamai.
**Host:** That’s a valuable perspective, Alex! As we wrap up, what final advice would you offer to businesses or individuals looking to navigate this complex cybersecurity landscape?
**Alex:** Proactive monitoring and adaptability are essential. Companies need to invest in the latest technologies, stay informed about emerging threats, and consider implementing a Zero-Trust architecture. On the investment front, keeping an eye on hedge fund activity can be a reliable strategy for identifying promising stocks in the cybersecurity sector. Stay vigilant and informed!
**Host:** Thank you so much for your insights today, Alex. It’s been a pleasure having you on the show.
**Alex:** Thank you for having me! It’s been great to discuss these important topics.