This is Why Cybersecurity Stocks Could See Higher Highs

May 25, 2023

When it comes to cybersecurity, we’re still not prepared.

Which makes no sense.

We’re sitting ducks with threats, and we’re still not ready for more.

Microsoft just warned that Chinese state-sponsored hackers had compromised “critical” U.S. cyber infrastructure across numerous industries. The Chinese hacking group, codenamed “Volt Typhoon” is reportedly working to disrupt “critical communications infrastructure between the United States and Asia.”

As noted by Microsoft: “Microsoft has uncovered stealthy and targeted malicious activity focused on post-compromise credential access and network system discovery aimed at critical infrastructure organizations in the United States. The attack is carried out by Volt Typhoon, a state-sponsored actor based in China that typically focuses on espionage and information gathering. Microsoft assesses with moderate confidence that this Volt Typhoon campaign is pursuing development of capabilities that could disrupt critical communications infrastructure between the United States and Asia region during future crises,” as noted here.

That’s just part of the reason cybersecurity stocks, like Palo Alto Networks (PANW) , were up more than $14.50 a share today. The other reason: earnings.

While its top-line was in line with expectations, the company is seeing margins improve, driving better-than-expected earnings performance. For its most recent quarter, the company saw revenue of $1.7 billion – up 24% year over year. It was also near the company’s high-end of guidance. Billings for the quarter came in at $2.3 billion- up 26% year over year. Adjusted profits of $1.10 a share, was ahead of expectations for 93 cents. It was also above the company’s guidance of 90 to 94 cents.

PANW last traded at $204.31 on a volume spike to 16.86 million shares, as compared to daily average volume of 3.57 million. The move in the stock now puts it above triple top resistance. It’s also now above 2022 resistance, too.

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