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Wedbush’s Ives: “cybersecurity could be the biggest outperformer”

on Sep 1, 2021
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  • Dan Ives says it is the golden age for the cybersecurity companies.
  • He expects the cloud security industry to eventually be worth $300 billion.
  • Ives picked Zscaler as his personal favourite in cybersecurity stocks.

CrowdStrike Holdings Inc (NASDAQ: CRWD) reported market-beating quarterly results late last night on strong demand amidst the recent spike in cyberattacks. It is, however, not the only player in the cybersecurity space that’s likely to outperform in the upcoming months, says Wedbush Securities’ Dan Ives.

Ives’ remarks on CNBC’s “Squawk Box”

Ives recently raised his price target on a list of cybersecurity stocks citing strong demand in the future. On CNBC’s “Squawk Box”, he said:

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“This is the golden age of cybersecurity because of the accelerated shift to cloud and more threats across enterprises and governments. Not just CrowdStrike, but names like Zscaler, Fortinet, and others are likely to do well in 2022 despite Biden’s new standards. It’s a subsector of technology that’ll be the biggest outperformer over the next four to six months.”

CrowdStrike shares were down about 4% in premarket trading, but Ives brushed it off as “noise”. On top of CrowdStrike, names like Fortinet, Zscaler, Tenable, CyberArk, TELUS, Ives added, were in the “sweet spot”.

“These are stocks that are going to continue to rerate, despite some of the knee-jerk reactions like we’ve seen in CrowdStrike,” he said.

Ives picks Zscaler as his personal favourite

According to Ives, transition to the cloud is still in the early stage. As more and more companies continue to switch, the cloud security industry could be valued at as much as $300 billion in the future.

He expects the sector to note an about 22% growth this year and “sustainable levels” in 2022.

“I think many have underinvested in terms of cybersecurity. But the biggest thing is you talk about these moves cloud with Microsoft, Amazon, Google, IBM and others; cybersecurity goes hand in hand,” Ives added.

In the sea of cybersecurity stocks, Ives picked Zscaler Inc (NASDAQ: ZS) as his personal favourite.