Wedbush senior tech analyst Dan Ives says cybersecurity spending will increase by 20% in 2021 as more companies ramp up protection following the SolarWinds hack that compromised state agencies and corporations including Microsoft. Ives said he’s very bullish on cybersecurity stocks given a “perfect storm of demand” in the field. He raised price targets for several cybersecurity stocks in a Sunday note.Names specifically in advanced threat detection, zero trust architecture, data security, and identity security will see a near-term surge of budget allocation based on the nature of the SolarWinds hack, said Ives.Visit Business Insider’s homepage for more stories.Wedbush’s Dan Ives was already anticipating an acceleration of cybersecurity spending for 2021 as more governments and businesses work from home and adopt cloud technology.
Now, following the recent SolarWinds attack that compromised state agencies and corporations including Microsoft, Ives anticipates sees a 20% “seismic increase” in cyber spending that will lift cybersecurity stocks.The senior technology analyst’s team raised price targets for multiple names across the sector, including Sailpoint Technologies (Ives is forecasting a 33% upside), Zix Corp (32%), Fortinet (22%), and Zscaler (21%.) Ives said he’s very bullish on cybersecurity stocks given a “perfect storm of demand” in the field. “We believe there is a $200 billion dollar growth opportunity in cloud security ‘up for grabs’ over the next five years for those vendors that have the solution sets to protect critical cloud deployments and seamlessly work with on premise and public/ hybrid workloads through a unified and deep solution set,” Ives said.Read more: Bank of America unveils its top stock pick in each of the 11 S&P 500 sectors and explains why they’re poised to dominate in the year ahead
While the overall sector will see a lift, names specifically in advanced threat detection, zero trust architecture, data security, and identity security will see a near-term surge of budget allocation based on the nature of the SolarWinds hack, said Ives.Currently, 33% of workloads use cloud technology, and this could move to 55% by 2022 according to Ives, leading to a large increase in spending in the cyber industry.”While WFH applications remain front and center, the exploding endpoints and volume of data being accessed from remote employees have caught CIOs flat- footed to protect this next step of the cloud shift with cyber security names playing a vital role in this strategic endeavor over the coming year,” Ives added. Over the past month, the First Trust Nasdaq Cybersecurity ETF has gained nearly 19% while the ETFMG Prime Cyber Security ETF is up 16%. Those funds are up 0.8% and 0.5% respectively on Monday.
Read more: BANK OF AMERICA: Buy these 26 cheap and fundamentally rock-solid stocks before the economic rebound sends them soaring in 2021