Well, this is embarrassing.
Reportedly, Chinese hackers breached US Treasury workstations and access “unclassified” documents, with China denying involvement. “The breach was orchestrated via a third-party cybersecurity service provider. Hackers were able to gain access to a key used by the vendor to override certain parts of the system, according to a letter the treasury department sent to lawmakers on Monday,” as reported by The Guardian.
Unfortunately, it’s another reminder that even the U.S. government is still poorly prepared for cyberattacks, which are only getting worse. All of which could cost the world nearly $10.5 trillion annually by next year.
“Cybersecurity Ventures expects global cybercrime costs to grow by 15 percent per year over the next five years, reaching $10.5 trillion USD annually by 2025, up from $3 trillion USD in 2015. This represents the greatest transfer of economic wealth in history, risks the incentives for innovation and investment, is exponentially larger than the damage inflicted from natural disasters in a year, and will be more profitable than the global trade of all major illegal drugs combined,” added Cyber Security Ventures.
That being said, investors may want to jump into cybersecurity stocks, such as:
Palo Alto Networks (SYM: PANW)
Weakness in oversold shares of Palo Alto Networks is a buy opportunity. Last trading at $184.20, we’d like to see the stock initially retest $205 near term. Helping, analysts at Jefferies just raised their price target on PANW to $240 from $225 with a buy rating. Wolfe Research also raised its price target on the security stock to $440 from $400 with an outperform rating.
Okta (SYM: OKTA)
At $79.64, Okta is another oversold cybersecurity stock to buy and hold in the new year.
Helping, Morgan Stanley now has an overweight rating on the stock, with the firm saying, “they see the demand environment ‘stabilizing,’ the headwinds from competition appear to be easing and new products are taking hold,” as noted by Seeking Alpha.
JMP Securities maintained its market perform rating on the stock following strong OKTA earnings. UBS kept its buy rating with a $108 price target. Bernstein also maintained its Market-Perform rating on Okta and increased the price target on the shares to $123 from $116.
Global X Cybersecurity ETF (SYM: BUG)
“The Global X Cybersecurity ETF (BUG) seeks to invest in companies that stand to potentially benefit from the increased adoption of cybersecurity technology, such as those whose principal business is in the development and management of security protocols preventing intrusion and attacks to systems, networks, applications, computers, and mobile devices,” says Global X.
BUG is also oversold at $32.20. From here, we’d initially like to see it retest $35 near term.
