There were not a lot of winners in the wake of the WannaCry attack — but cybersecurity stocks were among them.
As Reuters reported, after the markets closed Monday, the global ransomware attack that hit hundreds of thousands of computers across 150 countries buoyed awareness of cyber vulnerabilities. This means that companies may also push up their security spending, which would add to the coffers of these companies.
Anticipating a boost to the top lines of cybersecurity firms, which would, in turn, help profits, investors bid up shares in firms like FireEye, where shares leapt 8 percent. Network cloud safety play Sophos was up 7 percent on the day. One broad measure, a cybersecurity ETF (the ticker is HACK), grew by 3 percent for the session.
As the newswire noted, Street analysts were bullish on the sector. One note from Bernstein stated that firms as diverse as Citrix and government plays such as Lockheed Martin should see benefit from upgrade cycles and a ramp up in government spending.
Morgan Stanley stated in its own research that reducing the cost of breaches by 10 percent should save $17 billion worldwide on an annual basis.
All in, across the pond, firm-wide spending on cybersecurity should grow by 10 percent in Europe by 2020 on continued upgrades, as estimated by PGI. That estimate was elaborated by Brian Lord, a managing director at the firm, who told the newswire that “In many companies, there’s been an increase in investment in IT but not in the security that sits around it, so this investment is likely to play a bit of catch-up.”