PANW - The 3 Best Cybersecurity Stocks to Buy in December

2023-12-07 14:32:32 ET

InvestorPlace - Stock Market News, Stock Advice & Trading Tips

We’re still not prepared for cyberattacks. Even after all the warnings and attacks, we’re still sitting ducks, creating opportunities for some of the best cybersecurity stocks.

Look at hospitals, for example. A recent ransomware attack on Ardent Health “forced hospitals from New Jersey to New Mexico to divert ambulances from emergency rooms,” as noted by CNN. Granted, the Department of Health and Human Services unveiled plans to increase federal funding for hospitals and impose fines for lax security. But it’s too little, too late.

Hackers even breached a water utility in Pennsylvania. Following the attacks, the FBI and Cybersecurity and Infrastructure Security Agency (CISA) are scrambling to get water utilities to take their industrial equipment off the internet to avoid further hacks.

Millions of people are still being hacked. U.S. government agencies are also under attack, as are major corporations. Even public elementary schools have been hit. All of that tells us there’s much work that needs to be done to keep everything safe.

With that, here are some of the best cybersecurity stocks to consider.

Palo Alto Networks (PANW)

The last time I mentioned Palo Alto Networks (NASDAQ: PANW ), I noted, “Unfortunately, total billings, which jumped 16% year over year to $2.02 billion, missed estimates by five cents. It also missed the company’s range of $2.02 to $2.08 billion. That miss in billings is why PANW moved lower the other day, creating a buy[ing] opportunity.”

That was on Nov. 19, when PANW traded around $250. Now up to $287, I’d like to see it closer to $300 a share before the year is over. Helping, PANW and IBM (NYSE: IBM ) just announced “they will expand their strategic partnership to better enable clients to strengthen their end-to-end security postures and navigate evolving security threats.”

PANW is still one of the best cybersecurity stocks to consider.

CrowdStrike (CRWD)

On Nov. 19, I also mentioned CrowdStrike (NASDAQ: CRWD ), as it traded at $208. I noted, “If it can break above double top dating back to mid-2022, it could rally back to $240 a share.” By Dec. 6, it hit $244.64 and could still test higher highs on demand.

Shortly after my note, Wells Fargo (NYSE: WFC ) raised its CRWD target price to $250 from $200, with an overweight rating. As noted by TheFly.com, “The firm notes CrowdStrike reported another strong quarter, highlighted by 13% year-over-year growth in net new ARR. There are very few companies in the software universe generating 33% ARR growth, 21% OM, and a 30% free cash flow margin,” said Wells. As such, CrowdStrike remains a top pick.

Citi analysts also raised their price target on CRWD to $275 from $200, with a Buy rating.

ETFMG Prime Cyber Security ETF (HACK)

Or, take a look at the ETFMG Prime Cyber Security ETF (NYSEARCA: HACK ), which I also previously mentioned. With an expense ratio of 0.60%, HACK invests in hardware and software cyber security solutions stocks, such as CrowdStrike, Zscaler (NASDAQ: ZS ), Splunk (NASDAQ: SPLK ), Palo Alto Networks and Check Point Software (NASDAQ: CHKP ) — to name a few.

At the time, HACK traded around $54. After hitting a high of $58.31, it has become a bit overbought. However, given the demand for cybersecurity, I’d like to see the HACK ETF eventually run to $65 a share.

On the date of publication, Ian Cooper did not hold (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

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