The use and abuse of AI technology is driving significant growth in the cybersecurity field
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As the availability and power of artificial intelligence increases, the opportunities for its misuse also increase. In particular, cybersecurity is in the spotlight due to the risk of cyberattacks and the potential for commercialization of crime posed by AI. Furthermore, the UK government has warned that the volume and intensity of cyberattacks will increase with the introduction of AI. Despite the concerns, combining current cybersecurity stocks with the AI threats to contend with could be profitable.
Additionally, market forecasts are expected to show a compound annual growth rate (CAGR) of 9.4% to 13.8%. Growth in the cybersecurity market, which could be worth $500.7 billion by 2030, will depend on factors such as the integration of AI and further adoption of the Internet of Things. For investors, finding the right companies to meet the world's growing cybersecurity needs is key to successfully investing in this space. Here are his three cybersecurity stocks with AI projects that I believe meet the requirements for protecting against AI abuse.
Darktrace PLC (DRKTF)
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One of the first cybersecurity companies to use AI for good Darktrace PLC (OTCMKTS:DRKTF) has a bright future ahead of it. The company offers a cybersecurity platform that uses AI to learn an organization's standard day-to-day IT behavior. By collecting this data, AI can identify network anomalies typical of cyberattacks. Darktrace even claims that the service can interrupt ongoing attacks in seconds to combat things like ransomware and phishing.
From a financial perspective, Darktrace has shown strong revenue growth. Annual recurring revenue was $545.4 million, reflecting a 29.6% increase in FY23. Although still in the growth phase and not consistently profitable, the company reported net income of $52.52 million in 2023, which was less in comparison.
In my opinion, growth-focused startups like Darktrace have the potential to capitalize on the emerging cybersecurity industry. Therefore, investors should consider it one of the strongest cybersecurity stocks with ongoing AI projects.
Crowd Strike (CRWD)
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Specializing in cloud security, threat intelligence, and cyber attack response services, cloud strike (NASDAQ:CRWD) has been at the forefront of AI-driven growth. The company has been particularly successful with its It Falcon Platform product, which provides services that simplify security operations. The security platform accomplishes this using proprietary AI focused on establishing endpoint security for cloud servers.
Additionally, the company has experienced significant growth, reporting sales of $2.241 billion in 2023. CrowdStrike also maintains strong gross margins among subscription services. Our record GAAP subscription gross margin for the first quarter of 2024 was 78%, demonstrating our quality service and model for retaining our customers' subscriptions. Therefore, the company offsets its customer acquisition costs with the lifetime value that customers provide over time.
These aforementioned trends paint a healthy long-term picture for CRWD stocks as they adapt to complex conservation needs.
Palo Alto Networks (PANW)
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A major company with a reputation in the cybersecurity industry, palo alto networks (NASDAQ:Panwoo) shines among cybersecurity stocks with AI ventures. The company offers several products for enterprise-level customers who rely on secure cloud connectivity. Today, the company's core product is a platform that includes advanced firewalls and cloud-based protection that can scale to most businesses.
Palo Alto Networks is considered stable and safer by most analysts, thanks to its history of solid revenue growth. PANW is also the most profitable stock and company on this list, with profits of $1.7 billion in the second quarter of fiscal 2024. This equates to a price-to-earnings ratio of 44 times, which is close to the technology industry average of 35 times. These indicators suggest that PANW will continue to grow even after testing the current price ceiling.
I consider PANW to be one of the more stable stocks to invest in in the cybersecurity sector. As threats grow, demand for the company's services will only increase among existing customers.
On the date of publication, Viktor Zarev did not have (directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer and are influenced by InvestorPlace.com. Publishing guidelines.
