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Cybersecurity is once again in the spotlight amid a series of high-profile attacks on companies such as UnitedHealth Group (UNH), Live Nation (LYV), Roku (ROKU) and Snowflake (NYSE:SNOW).
The Snowflake breach, which came to light in late May, could prove to be one of the most extensive to date, with hackers reportedly stealing data from potentially 165M clients of the data cloud giant.
Since the hack was revealed last month, cybercriminals have reportedly been demanding payments as high as $5M from Snowflake clients amid threats their data will be auctioned off on the dark web. The Snowflake hack has also been linked to data breaches at Live Nation’s Ticketmaster unit, Pure Storage (PSTG), Advanced Auto Parts (AAP) and Lending Tree (TREE).
Meanwhile, UnitedHealth Group is still recovering from a ransomware attack that forced the company to pay $22M to a cybercriminal gang to regain access to its systems. UnitedHealth management has estimated the attack will cost the company up to $1.15B this year.
Which brings us to today’s cybersecurity question: Are we actually seeing a spike in cybercrime or is it just getting more attention?
We asked SA analysts Julian Lin and Mark Holder of Stone Fox Capital to weigh in on the subject.
Julian Lin: Cybersecurity companies have been noting the potential for generative AI to amplify the cyberattack threat, and we certainly are seeing evidence of this taking place with a seemingly greater number of high-profile breaches, including a 15K account hack at Roku (ROKU) earlier this year.
It is unclear to what extent generative AI might influence the cybersecurity landscape over the long term, but one thing’s clear: demand for cybersecurity products remains strong even several years post-pandemic and will likely remain strong for many years to come.
Mark Holder: Gartner forecasts global security and risk management spending to surge 14% in 2024 to $215B. Cloud security is the leading growth area at nearly 25% growth to $7B and data security is forecasted to grow 17% to reach $4B.
Corporations are spending as if cybercrime is growing at a rapid clip, but what ultimately matters is that cybersecurity spending tends to grow at a double-digit rate due to growing threats, whether a spike in cybercrime is occurring or just garnering more attention.
CrowdStrike (NASDAQ:CRWD) plays into the overall ongoing demand in cybersecurity, while recent IPO Rubrik (NYSE:RBRK) plays into the data security category and overall surge in ransomware where data protection and backup is so crucial to avoid outages and lost data.