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- Tenable (NASDAQ:TENB) and Palo Alto Networks (NASDAQ:PANW) are the top two cyber security picks for 2022, Wedbush Securities wrote in a note to investors on Monday.
- Analyst Dan Ives notes that he is "bullish" on the cyber security sector, aided by cloud spending. He believes that cyber security budgets will increase 21% in 2022, roughly a 1% increase from a "robust" 2021.
- "The threat landscape and bad actor/nation state backdrop continues to accelerate, coupled by an aggressive move by enterprises and governments to the cloud which has multiplied the threat vectors facing CIOs," Ives wrote in a note to investors.
- Tenable (TENB) shares have gained slightly more than 3% year-to-date, while Palo Alto (PANW) has jumped more than 50% year-to-date.
- In addition to Tenable (TENB) and Palo Alto Networks (PANW), Ives added that the firm's favorite picks going into next year are Zscaler (NASDAQ:ZS), CyberArk (NASDAQ:CYBR), Varonis (NASDAQ:VRNS), Sailpoint (NYSE:SAIL), Fortinet (NASDAQ:FTNT).
- Ives added that he thinks Wall Street is underestimating "the massive strength" in spending in cyber security, as well as an increase in federal spending, both of which should give "an additional tailwind for the cyber security sector over the next 6 to 12 months."
- The shift to the cloud is also likely to help the cyber security sector, as just 43% of the workloads are on the cloud currently, but that is projected to hit 70% by 2025, which could be a $300 billion growth opportunity in cloud cyber security spend over the next few years.
- Last week, Palo Alto Networks (PANW) was listed as a top pick for 2022 at Mizuho, as the research firm said a continued economic recovery, along with a less-than-expected deceleration in growth across the broader economy could boost shares.