Our theme is Cyber security stocks The stock index, which includes CrowdStrike CRWD and others, is up about 11% this year, performing slightly better than the broader Nasdaq 100 index, which is up about 8% over the same period. While broader tech indexes have benefited from the frenzy around generative artificial intelligence, cybersecurity stocks are also seeing some tailwinds. As the world becomes increasingly dependent on interconnected computer systems, cyberattacks can disrupt economic activity, destroy critical infrastructure, and compromise national security. As a result, digital security has become an increasingly important investment priority for governments and businesses. Russia may carry out further cyberattacks against Western targets as it faces difficulties with its military offensive in Ukraine. Additionally, cybersecurity and ransomware attacks have also increased over the past year, with large-scale attacks such as the ransomware attacks on Dish Networks and Boeing BA. This should lead to steady demand for cybersecurity. Additionally, the federal government is expected to increase spending on cybersecurity in the future. The government expects to spend $13 billion on cybersecurity in 2025, compared to the $11.8 billion earmarked for cybersecurity spending for private agencies in 2024, according to the White House's 2025 budget summary released last week. This exceeds the $11.3 billion in 2023.
Looking at the longer term, CRWD stock has shown a very strong increase of 50% from the level of $210 in early January 2021 to about $315 currently, compared to the S&P 500 index over the past three years. Compared to the 35% increase, this is a very high level. However, the growth in CRWD inventories is far from consistent. The stock returned -3% in 2021, -49% in 2022, and 142% in 2023. In comparison, the S&P 500 returned 27% in 2021, -19% in 2022, and 24% in 2023.it shows that CRWD underperformed S&P In 2021 and 2022.
in fact, Consistently outperforms the S&P 500 – Good times and bad times – The past few years have been difficult for individual stocks. Information technology sector stalwarts like MSFT, AAPL, and NVDA, as well as mega-sized companies like GOOG, TSLA, and AMZN.
In contrast, the Trefis high-quality portfolio, which includes a collection of 30 stocks, Outperformed the S&P 500 every year over the same period. why is that? As a group, Headquarters portfolio stocks carried less risk and delivered better returns compared to the benchmark index. It's not been a roller coaster ride, as evidenced by the performance metrics of our corporate portfolio. Given the current uncertain macroeconomic environment of high oil prices and rising interest rates, CRWD and other securities stocks may face a similar situation in 2021 and 2022. Underperform the S&P Will we see a significant increase over the next 12 months?
The topic of cybersecurity seems to have a long way to go in terms of growth. Research firm GartnerIT predicts that corporate information security spending will reach an estimated $186 billion in 2023 and increase to $278 billion by 2027. This corresponds to a compound annual growth rate of 11%. That said, competition is heating up in the cybersecurity space, with major tech companies such as Microsoft MSFT focusing on providing generative AI-assisted security tools for cloud operations. Additionally, smaller cloud-based security companies are also gaining traction. As the security space becomes more crowded, price competition and margin pressures are likely to emerge. Among our themes, Qualys is one of the worst performing companies, falling 13% year-to-date in 2024. CrowdStrike, on the other hand, has been the strongest performer, with its stock up more than 24% so far. Year.
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