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The Outlook for Cybersecurity Stocks - YouTube
Channel: TD Ameritrade Network
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now we want to turn our attention from
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cloud right over to cyber security
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because this is a hot topic you've seen
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the cyber security names jumping denives
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of wedbush all over this you're saying
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this is a group to watch you have names
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in this group outperform outperform
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outperformance russia and ukraine
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tensions and conflict continues and
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sanctions on russia they don't like this
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you're expecting more cyber warfare and
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attacks and these companies
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in the u.s abroad in
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europe are all beefing up their cyber
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security so give me your outlook here
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because how long does this take how
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intense is this your thoughts
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look i mean cyber security is already
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seeing massive growth i mean look at
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this past earnings season probably the
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strongest prince we've seen in the last
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seven or eight quarters but in terms of
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what we're seeing here in terms of the
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ukraine it's cyber warfare that's taking
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place and we've heard it from executives
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across the board contacts in the beltway
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as well as our contacts in tel aviv and
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throughout israel and i think it's going
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to add two to three hundred bits of
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growth to cyber security and i think
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this is a space nicole we look at within
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the space is up 35 40 percent the rest
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of the year it's a pocket of strength in
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a volatile market
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yeah and it's so hard i think the fact
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that you noted the volatile market it's
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a very volatile market and folks who
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love some of the growth names names that
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you focus on so closely
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and you still love i'm sure there's
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plenty of names that you think are at a
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great discount now down 20 30 40 percent
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but this group here you've watched very
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closely you've come on you've
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recommended many of these names but now
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i'm really saying that these are the
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ones to focus on once again i mean z
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scaler for example is a name that you've
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come on palo alto another that you've
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had an outperform on for some time you
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have microsoft cyber arc and tenable
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those are your outperforms today tell me
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a little bit what differentiates some of
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these companies can we get these in an
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etf should somebody be buying them
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across the board tell me your thoughts
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yeah and look and i think just being the
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volatility i mean z-scaler
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had just an unreal gold standard quarter
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that stock sold off significantly post
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print that was a gift basically wrapping
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a bow you know to own that i think the z
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scale is ultimately a 325 350 dollar
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stock and when you look at the reason i
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put d scaler how out to attendable i
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always put crowdstrike sentinel 1
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this is about shift to the cloud and the
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more and more threats especially what
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we're seeing on enterprises i mean
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there's a handful of companies that
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protect i look at pow although that's a
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re-reading name i think this is a stock
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not just on a free cash flow basis
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similar what we saw in fortinet i think
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pow out those one that has 30 percent
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upside and and you go down i think
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cannibals probably are topic because of
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their federal exposure within the
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beltway as well as potential m a
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candidate and if you you could play with
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names like uh the specific names a
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basket approach even some of the cash
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flow stores like a checkpoint for net or
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there's etfs like the hack etf which is
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a cyber security index
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and as you look at this group i mean you
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talk about the upside potential and
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you've been on with us talking about so
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many of these names and to your point
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we're seeing in ukraine right they've
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already spoken that they experienced
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cyber attacks on the government on their
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businesses and banks and things like
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that as as russia's being pushed out of
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the swift communication system which is
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how the banks talk to one another the
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largest banks of russia we're watching
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financials here at home i mean it can
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affect anything and everything at this
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point here i know fintech is always in
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your wheelhouse are there other names
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that are really on your radar that
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you're constantly checking or maybe
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super excited about the potential in the
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year ahead i mean you know we've talked
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about tesla and uber and and so many
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others are there other names that you
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really love at this point
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yeah well first off on the ukraine
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situation now they more cut off oxygen
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to the economy i think most investors
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are
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hoping that tech companies just pull the
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plug worst case i'll be one to two
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percent exposure for to overall fang
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names so this is essentially breadcrumbs
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and anyone that has any sort of moral
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compass uh is they want to see this uh
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you know in terms of the move that tech
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companies make now so i view that as
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contain risk i look at apple i think
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nicole we sit here six nine months from
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now this is back well above three
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trillion because i think what we're
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starting to see
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in the geopolitical stocks like apple
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microsoft tesla have just sold off in
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terms of what i believe massively
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oversold i think taxes oversold as i've
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seen the last six seven years you own
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these names geopolitical creates the
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opportunities that's been our playbook
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since 99.
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and yeah and if you go all the way back
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i mean there's not that many
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opportunities where you see tech get
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crushed the way it has on certain days
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right you mentioned names like apple
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microsoft tesla as being names that are
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opportunities in the long term here as
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we watch these drivers my concern is um
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and you note and i noted within your
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report how you were saying that they've
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put up the the wall you had a phrase for
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it in the report about how they put up
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these cyber walls that are extra
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protection um at this point here in u.s
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companies i almost feel like why aren't
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they up all the time because but i don't
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know enough about it to understand why
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but i think this is not something for
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just this week i mean this is something
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going forward just because if if the
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russia ukraine conflict comes down we
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still could face cyber warfare three
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months six months ten months out right
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in in five ten years out i mean it's
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more and more data yeah there you go
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consumer
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as well as from an enterprise
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perspective and remember a lot of the
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bad actors
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individuals you never ever want to come
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across in the street or a dark alley
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that they're in russia in terms of from
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a hacking perspective a lot of dark web
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vast majority hacks come from eastern
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bloc and russia what i would say state
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sponsored so this is something we're
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going to see that increase in spending
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but that ultimately is bullish for cyber
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security companies and even names like
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palantir which are significantly exposed
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especially when it comes to the
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government side
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and i think it's something where in this
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market cyber security is a pocket of
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strength it's an
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offensive defensive sector and it's one
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that i still think is well under owned
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relative the opportunities that we see
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going forward
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are you less concerned about interest
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rates and how they affect some of these
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tech names uh because we've seen some
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some fluctuation in the rates right we
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saw the ten year at one seven one eight
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one nine um and sometimes right we see
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that divergence as the rates yields go
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up tech stocks go down right because we
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talk about future earnings for some of
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these names are you less concerned about
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that here now
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miller guy i sat next to an economist in
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the office next to me for 12 years if i
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listened to them i never would own the
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tech stock from 2000 to where we are
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today so the point is that you could go
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down and start be maniacally focused at
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10-year
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inflation we're going to have uh hikes
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at every meeting between now and 2030.
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look i've been down that pat
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is like this creates the oversold nature
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in technology it's a fourth industrial
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revolution tech stocks most oversold
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i've seen in six years and also a 20-bit
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move in the ten years and change our
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bullish thesis
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yeah so they're the most oversold you've
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seen in more than five years is that
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what you just said
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most oversold that i've seen going back
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you know at least five years potentially
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more relative to the valuations on a
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growth growth is two to three acts
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historical intact and that's why it's
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created the opportunities most of our
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conversations it's not investors white
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knuckles it's what do i own where do i
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own it that's created the opportunity
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that's why i seen a bounce back today
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especially with russia on an overall
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scheme for tech companies it's soft on
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the bread at the restaurant before the
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meal in terms of to put in perspective
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and that sounds great and i love that
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and i love that i see you back in new
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york city too we'll leave that for
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another day
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always great and such a pleasure to have
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you on the show dan ives thank you thank
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you for being on with us today a lot of
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outperforms on these cyber security aims
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that we focused on and the others that
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you love so much dan ives of webbush
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glad he was on with us today key time to
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be on
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you
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