Hackers worldwide appear to have taken sides in the ongoing Russian invasion of Ukraine, with pro-Russian hackers such as the Conti cybercrime group vowing to use its “full capacity to deliver retaliatory measures” against “Western warmongers” and to “strike back at the critical infrastructures of any enemy”.
On the other side of the hacker divide, other cyber elements are coming out of the woodwork to help Ukraine, with Anonymous launching its own cyber war against Russia, claiming responsibility for hacking the Kremlin website, taking down Russian media sites and messing with the Russian stock exchange
In the meantime, all the cyber activity simply highlights the boom this is all about to mean for the cybersecurity industry. Since the start of the invasion, cybersecurity stocks have been among the few to gain major momentum.
Wedbush Securities analyst Dan Ives wrote that the current cyberattack scare could add 200 to 300 basis points of growth to a sector that was already poised for 20% year-over-year growth this year.
“With a significantly elevated level of cyberattacks now appearing on the horizon, we believe added growth tail winds for the cybersecurity sector and well-positioned vendors should be a focus sector for tech investors during this market turmoil,” Ives wrote.
The Russian-Ukraine conflict comes on the heels of a pandemic that had already significantly accelerated our digital transformation and lured in a new flock of cyber criminals.
Spending on cybersecurity measures is now projected to grow exponentially. Even without the Russian-Ukraine element, forecasts for the period from 2021 to 2025 put cybersecurity spending to grow cumulatively to $1.75 trillion.
Last year, investors poured nearly $22 billion into cybersecurity startups, compared with $8.9 billion in 2020.
California-based cybersecurity company Palo Alto Networks has seen a 13% jump in share prices since the start of the Russian invasion of Ukraine. For its fiscal year 2024, Palo Alto expects revenue to reach $8 billion, and total billings for that year to hit $10 billion. Even though the stock is down 12% so far this year, analysts remain overwhelmingly bullish on the stock, with a $616 price target.
CrowdStrike, which markets anti-ransomware services, took a hit in recent months and is down over 20% YTD; but the Russian invasion propped it back up, with 13% gains in the last week. Analysts are bullish on the stock and see it rising to $275 by the end of the year.
The average target price among analysts for Palo Alto Networks stock suggests near 10% upside and Crowdstrike 50%, and they’re not alone. The majority of other companies in the sector are looking at similar upside.
“In a very nervous investing backdrop for tech, we believe the cyber security sector is a clear pocket of strength that we would be overweighting at current levels,” Ives concluded.
Cyberattacks are now a key weapon in modern-day warfare, and last year made the threat to Americans clear enough when a spate of ransomware attacks crippled critical American infrastructure including the the nation’s largest oil pipeline, Colonial Pipeline, in addition to thousands of Microsoft Exchange Server zero-day attacks, the SolarWinds data breach, the Kaseya ransomware attack and the supply disruption at meatpacker JBS by private and state-sponsored threat groups.
The situation has become so dire that U.S. President Joe Biden recently issued a rallying cry to tech executives urging them and other key players in the industry to do more to fight the growing cybersecurity threat.
The Senate Foreign Relations Committee leaders are now pushing to include sanctions for cyberattacks as part of a wider bill of actions against Russia.
On the other side, global hacking groups Anonymous claimed responsibility for taking down the websites of the Russian oil giant Gazprom, several Russian and Belarusian government agencies and hacking multiple state TV channels to show pro-Ukraine content.