Despite recent market weakness in several sectors, CNBC’s Jim Cramer said he sees a bull market in cybersecurity.
“You always want to buy the stocks of companies in industries where demand is most rabid,” Cramer said. “The litany of hacks has made it clear that you either pay a king’s ransom to the bad guys, or you see your earnings slaughtered.”
Cramer pointed to recent high-profile security breaches that came to light after the U.S. Securities and Exchange Commission ruled that companies have four days to reveal a hack, which showed the widespread nature of the issue. MGM, Caesars, Johnson Controls and Clorox have faced recent hacks. Clorox took a huge earnings hit due to processing delays and product outages, Cramer noted.
To Cramer, cybersecurity companies such as Palo Alto Networks, CrowdStrike, Okta and Zscaler may be very valuable with businesses willing to pay high prices to protect against hackers.
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Disclaimer The CNBC Investing Club Charitable Trust holds shares of Palo Alto Networks.
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