Fortinet ( NASDAQ: FTNT ) and Checkpoint Software Technologies ( NASDAQ: CHKP ) were added to Wedbush's best ideas list on Tuesday after the investment firm said it had not seen any signs of a major growth slowdown for the space.
"While a slowing macro and potential recession are being closely watched, priorities are clear for [Chief Information Officer] and [Chief information security officers] in this environment as protecting enterprises against rising sophisticated threats is a major issue for Boards and C- Level with more data migrating to the cloud and vulnerabilities across the board (endpoints, mobile, access levels)," analyst Dan Ives wrote in a note to clients.
Going further, Ives said that adding Fortinet ( FTNT ) and Checkpoint Software Technologies ( CHKP ) to the list shows the firm's "high conviction" in the stocks, adding they are two of the firm's favorite cyber security stocks.
Ives reiterated the outperform rating and $145 price target on Checkpoint Software Technologies ( CHKP ) and reiterated the outperform rating and raised the price target to $76 from $68 on Fortinet ( FTNT ).
In addition, Ives noted that even with the markets being skittish because of rising inflation, interest rates and concerns of a global recession, cyber security is still seeing strong growth and is viewed as a "safety blanket tech sector."
"While investors will fret about valuations on hyper-growth names in the near-term, our checks have been firm around cloud cyber security, firewall refreshes, [privileged access management], endpoint, and vulnerability/threat management," Ives explained, adding that rising threats are good for increased cyber security budgets.
The firm's other favorite cyber security names include Palo Alto Networks ( PANW ), CyberArk ( CYBR ), Tenable ( TENB ) and Zscaler ( ZS ).
Last week, Morgan Stanley said cyber security companies were seen as "durable" going into earnings season, but noted that Check Point ( CHKP ) may have "difficult competitive dynamics," given that more than 40% of the company's revenue comes from Europe .
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Fortinet, Checkpoint added to Wedbush Best Ideas List as firm says no signs of growth slowdown