The tense geopolitical environment and accelerated digitization of the economy are unsurprisingly coming with an increasing number of highly damaging cyberattacks and the momentum is unlikely to slowdown any time soon.

The next growth driver is already visible with the emergence of the Internet-of-Things (IoT), powered by 5G networks. IoT will spark a massive rise in the number of new vulnerabilities as billions of new devices are expected to be connected and to boast smart features in the future, including autonomous vehicles, wearable medical devices, voting machines, smart homes…

Against this backdrop, all companies and organizations face massive intrusion threats, suggesting they will have no choice but to roll out Zero Trust security architectures that combine user identification and access management with device authentication and protection and to massively invest in detection tools and automated response solutions.

Rising data compliance requirements in several parts of the world where governments impose to store and process data locally are another major challenge and opportunity for the cybersecurity industry.

From a financial standpoint, profitability of cybersecurity is lagging that of other software segments but a combination of strong revenue growth and M&A should give a boost to margins and earnings growth and support valuations across the board.

Finally, M&A is adding some spice to the investment case. The growth outlook as well as the cybersecurity industry fragmentation are attracting both private equity firms seeking to extract synergies by combining various cybersecurity assets and Tech companies seeking to offer end-to-end security solutions.


Smart Connectivity/Digital Security: When Networking And Cybersecurity Converge

As illustrated by Google’s recent acquisition of Mandiant and Cisco’s increasing focus on security, a convergence between tech hardware and cybersecurity software has been taking place, a move that should intensify over coming years. For networking hardware specialists such as Cisco and Juniper, implementing firewalling and threat detection software in their routers and switches is…

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Digital Security: Resilient Growth Amid A Tough Environment

Many cybersecurity companies, including Fortinet, Cloudflare or Rapid7, reported their quarterly earnings in recent days. While revenue and earnings were overall solid, most companies hinted at increasing deal scrutiny from their corporate customers, lengthening sales cycles and softening growth trends going forward as customers navigate a complex environment and are closely watching their spending amidst…

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Active Equity

Issuer / Rating

UBS / S&P A+

Inception Date