The year 2019 has been a good year overall for the cybersecurity industry as a number of cyber-attacks and data breaches plus the consequences of old violations kept the stocks rallying throughout.

Here we paint a general picture based on the expected trends, which are likely to shape the cybersecurity landscape in 2020.

Top Risks & Trends of 2020

• IoT Security: Growing number of connected devices among enterprises is expected to increase the need for efficient monitoring and management of threats on real-time basis. Detection and prevention of advanced attacks are likely to gain more significance than device profiling and inventory, which have been the focus of IoT-technology providers so far. However, lack of end-to-end IoT-focused security service solutions is a headwind.
   
• Industrial Security: With the advent of industry 4.0, new risks crept in this year, which might pose major threats in 2020. Development of the Industrial IoT, digitization of factories and the infusion of AI made industrial networks more connected, thereby exposing the industrial sector to even more security perils.
   
• Growing Adoption of the Zero Trust Approach: As more and more enterprises transition their workloads and data to the cloud, every point in the network is becoming more vulnerable to security infringement. Therefore, perimeter security is no longer enough to protect the organization from safety lapses. Summing up, the model follows one rule, “Never Trust, Always Verify”.
   
• Serverless Security: Emergence of serverless computing technologies, such as AWS Lambda, is projected to drive demand for security solutions, which have the ability to prevent any breach that happens due to increased misconfigurations and security gaps.
   
• Emergence of SASE Technology: SASE (secure access service edge) was recently acknowledged by Gartner as one of the most promising emerging technology in enterprise networking. Uptake of this technology is likely to be driven by an ongoing architectural transformation of traditional data center-centric networking and security to the cloud technology for better catering to the current mobile workforce as well as achieving higher acceptance of the same.
   
• Data Breaches: This continues to be the biggest cybersecurity concern. Web application flaws are a leading source of data breaches, making web application security a top priority for all organizations as they approach the new year. Per Cybersecurity Ventures, cybercrime is anticipated to cost businesses globally by more than $6 trillion annually within 2021.
   
• Automation and Integration: Security professionals are forced to do more with less. So, automation and integration are becoming necessary across the board. By integrating security with agile processes, such as DevOps, organizations can effectively manage risk. Numerous web applications combining multiple web services are difficult to secure while automated solutions are becoming necessary to reduce the workload on security teams.

Cyber Security Stocks to Gain From These Trends

While frequency of cyber-attacks doesn’t bode well for most organizations, the players operating in the cybersecurity industry are positioned to benefit immensely. Notably, president Donald Trump proposed a budget of $17.4 billion for cybersecurity-related activities, reflecting a 5% year-over-year increase in 2020.

Considering the higher spending and aforementioned trends, we highlighted four cybersecurity stocks with potential to make the most of the teeming opportunities in this space.

These stocks either have a Zacks Rank #1 (Strong Buy) or 2 (Buy), making them good investment opportunities.You can see the complete list of today’s Zacks #1 Rank stocks here.

Moreover, these stocks also have a market capital of more than $1 billion.

Best Bets

Qualys (QLYS Quick QuoteQLYS - Free Report) solutions are provided through its QualysGuard Cloud Platform, which offers enterprises instant visibility of their IT assets and global security practices. The company’s cloud-based security and compliance stack are being received positively by new and existing customers.

The stock has a Zacks Rank of 1 and a market cap of $3.3 billion. The Zacks Consensus Estimate for its 2020 earnings has been revised 1.2% upward to $2.49 over the past 30 days.

Fortinet (FTNT Quick QuoteFTNT - Free Report) is focused on expanding and enhancing its Security Fabric product suite, which is witnessing strong global demand owing to digital transformation across most industries.

The stock is Zacks #1 Ranked and has a market cap of $18.29 billion. The Zacks Consensus Estimate for its 2020 earnings has been raised 13.9% to $2.71 over the past 60 days.

CyberArk Software Ltd. (CYBR Quick QuoteCYBR - Free Report) is benefiting from its Privileged Access Security Solution, a powerful technology to enable customers to lower security hazards across their operations in the cloud.

The stock has a Zacks Rank of 2 and a market cap of $4.39 billion. The Zacks Consensus Estimate for its 2020 earnings has moved 5% north to $2.72 over the past 60 days.

#2 Ranked stock Radware’s (RDWR Quick QuoteRDWR - Free Report) fully-managed Cloud WAF and Cloud DDoS solution is gaining momentum across industries. The company has a market cap of $1.18 billion.

The Zacks Consensus Estimate for its 2020 earnings has increased 4.3% to 96 cents over the past 60 days.

Zacks Top 10 Stocks for 2020

In addition to the stocks discussed above, would you like to know about our 10 top tickers for the entirety of 2020?

These 10 are painstakingly hand-picked from over 4,000 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Start Your Access to the New Zacks Top 10 Stocks >>