Pro Research of the Week: Cybersecurity Stocks Poised to Ride AI Wave in H2
Cybersecurity stocks took the spotlight during the COVID-19 pandemic in 2020 and 2021 before undergoing a significant correction in 2022. But recently, stocks in the sector have started showing signs of recovery after a slow start to 2023.
The First Trust NASDAQ Cybersecurity ETF (NASDAQ:CIBR), which is one of the leading ETFs focusing on cybersecurity, has seen an impressive gain of nearly 17% since May.
But let's not get ahead of ourselves. Before we dive into finding the best cybersecurity stock to invest in for the rest of 2023 and beyond, let's take a moment to understand why cybersecurity stocks are an attractive investment option right now.
To do this, we'll use InvestingPro financial analysis platform to compare the sector's leading stocks.
The cybersecurity sector has experienced rapid growth in recent years due to the increasing frequency and sophistication of cyber threats. This trend has prompted significant investments in cybersecurity as governments, businesses, and individuals strive to protect themselves against potential cyberattacks.
Additionally, the sector is grappling with a shortage of skilled professionals, which has resulted in an increased demand for external solutions and the automation of IT security processes. The utilization of AI, including chatGPT, further contributes to the effectiveness of cybersecurity measures.
According to analysts at Morgan Stanley, the use of generative AI has accelerated the creation and mutation of malware, placing a heavier burden on security organizations and highlighting the necessity of automation in the industry.
Generative AI not only enhances the productivity of cybersecurity solutions by automating routine tasks such as data reporting and alert
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