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A recent series of cyberattacks on American companies has put cybersecurity back in the spotlight.
UnitedHealth Group (UNH), for example, is still recovering from a ransomware attack on its Change Healthcare unit that ended up crippling administrative functions at hospitals and clinics. and pharmacies nationwide. The health insurer was forced to pay 22 million dollars to a cybercriminal group regain access to your systems.
Also making headlines in recent months is 23andMe (ME), which experienced a security breach last fall that affected the data of around 7 million of its users. It is believed that the hackers gained access through compromised login credentials.
In late May, it was revealed that data cloud giant Snowflake (NYSE:SNOW) was also affected, as hackers stole data from potentially 165 million customers using compromised login credentials. And earlier this month, Live Nation (LYV) confirmed that its Ticketmaster unit was also the victim of a cyberattack.
Which brings us to our question of the day for cybersecurity investors: What is the main cybersecurity threat facing companies right now?
We asked SA analysts Mark Holder of Stone Fox Capital and Julian Lin what they considered the most pressing threat.
Brand owner: While the traditional threat from cybercriminals is the theft of sensitive corporate data, such as credit card numbers and customer identities, the biggest threat to corporations now is the current ransomware trend. Cybercriminals are increasingly using ransomware to shut down corporate networks and steal data that requires payments to restore and get the business up and running again. Businesses face both the cost of lost sales due to network outages and the cost of paying for ransomware.
Cybersecurity Ventures estimates a total annual ransomware cost of $265 billion by 2031, and the average ransomware attack now costs at least $10 million. Rubrik (New York Stock Exchange:RBRK) recently posted substantial growth in this threat area and the stock is one of the most reasonably valued cybersecurity stocks on the market right now.
Julian Lin: Generative ai may be increasing the urgency for companies across the board to elevate their cybersecurity protections, creating potential scope for cybersecurity companies to grab market share from legacy vendors. This may help explain how some names like CrowdStrike (NASDAQ:CRWD) and Zscaler (NASDAQ:ZS) continue to post incredible revenue growth with seemingly no signs of a slowdown approaching.
