Tech To War

As the HK market falls to multi-year lows at 18600, China is gripped by all-time high cases of Covid infection, and 51 million people are now in lockdowns from Shanghai to Shenzhen, together with the continued clampdown on Big Tech represented by Jack Ma, his Alibaba [BABA] now $77 down from a recent $150 and an all-time high of $320.

However, brighter news [if you can call it that] lifts defense and cybersecurity sectors across the globe which are exposed to the worsening conflict in Europe as Russia continues its military operation against Ukraine.

Unsurprisingly, anything related to defense and cybersecurity stocks are seeing valuations rise. Investors have taken note of pledges by the EU to boost defense expenditure. German Chancellor Olaf Scholz said that defense spending in Europe's biggest economy would be increased to 2% of gross domestic product, from an estimated 1.5% in 2021.

Raytheon [RTX], the stinger missile manufacturer, is up 18% already this year and rose a further 4.6 % on Monday the 14th. Lockheed Martin [LMT] + 5.4% sees increased demand for its F35 fighter jets. Northrop Grumman [NOC] +7% as its drones are increasingly useful for both surveillance and attack purposes.

Companies within the cybersecurity sector include the cloud storage security firm Zscaler [ZS], Crowdstrike [CRWD] Holdings, which markets anti-ransomware services, and Fortinet [FINT], a maker of network security systems.

State-sponsored Cyberwarfare has grown vastly over the last ten years with new ?capabilities against networks, data centers, and infrastructure Tenable Holdings [TENB], [Palo Alto Networks [PANW] reported strong demand for its security software, elsewhere Telos [TLS], Varonis Systems [VRNS], and CyberArk [CYBR] are all worthy of consideration, given elevated levels of cyber-attack and should be a focus for investor attention in this volatile market turmoil.

Cyber threats are becoming both pervasive and increasingly sophisticated as the migration to the 'Çloud' [currently about 1/3] continues apace. Spending to tackle the threat is estimated to rise to $175 billion by 2024 from around $130 billion today. It's calculated that over 380 million entities had their data compromised in 2020 as internet-enabled devices are rapidly adopted, so hackers who want to steal or ransom valuable data rise. OKTA is involved in Identity access management, and Mimecast [MIME] provides solutions that detect and block malicious emails are two more to consider.