A large-scale cybersecurity operation by a foreign power has never been conducted on this scale and over such a period of time to target so many companies and agencies on US soil. While the exact details and harms of the cyberattack are still being investigated, it is clear: many U.S. corporations, government agencies, and even large technology firms have been surprised.
“The attack combined extremely clandestine craftsmanship with cyber tools never seen before in any previous attack, with a strategy that relied on a weak link in the software supply chain that all US companies and government institutions rely on – an approach that security experts have long feared, but one that has never been applied in such a concerted manner to US targets, “according to a Wall Street Journal analysis of the attack.
As a result of the breach, many cybersecurity stocks rallied on expected demand for rising IT and security spending from both government agencies and the private sector. The First Trust NASDAQ Cybersecurity ETF (CIBR) jumped 5% on Friday.
The Cybersecurity and Infrastructure Security Agency (CISA) issued a warning Thursday that dated the attack to “at least March 2020”. This week’s Wall Street Journal coverage dated SolarWinds Corporation (SWI) Attack as early as October 2019. US government officials like Secretary of State Mike Pompeo and private actors like FireEye, Inc. (FEYE) have identified SVR, Russia’s foreign intelligence agency, as the most likely unit behind the attack.
Due to hackers attaching their malware to the SolarWinds software update, the US departments of State, Treasury, Commerce, Energy and Homeland Security, among others, have been affected. the National Institutes of Health and the California Department of State Hospitals; and Cisco Systems, Inc. (CSCO), NVIDIA Corporation (NVDA), VMware, Inc. (VMW), Deloitte and Belkin International, based on the Wall Street Journal’s analysis of the Internet records. The extent of the damage shows that everyone is vulnerable.
SolarWinds admitted the attack could have affected up to 18,000 of its customers, while CISA determined that SolarWinds was not the only entry point where the attackers broke cybersecurity defenses. “CISA has evidence that there are other first access vectors than the SolarWinds Orion platform.” Officials said. “This APT actor has demonstrated patience, operational security and complex craftsmanship in these interventions. CISA believes that removing this threat actor from compromised environments will be very complex and challenging for companies.”
This is where cybersecurity companies come in, which are expected to benefit from this pressing need to strengthen defenses against foreign threats and conduct operations in a more remote work environment. According to a study by Gartner, the entire enterprise security market is expected to grow by more than 10% annually through 2024.
Winner since the beginning of the year
While cybersecurity stocks find themselves in a crowded field with an array of offerings and target markets to capitalize on rising demand, the following names are among the biggest winners this year and are set to continue their streak.
CrowdStrike Holdings, Inc. (CRWD), which is up 345% this year, delivered third-quarter results that exceeded analysts’ expectations. It also received upgrades and Price target Analysts raised last month. While some consider CrowdStrike stocks to be overvalued, other analysts cite the company’s strong performance and price momentum as the rationale for a buy rating.
Tenable Holdings, Inc. (TENB), which is up 129% since the beginning of the year, offers solutions for vulnerability management and shows business infrastructure and vulnerabilities. The number of Hedge funds Holding positions in this stock is currently at an all time high. With its customers, which include more than 50% of the Fortune 500 and more than 30% of the Global 2000 and major government agencies, Tenable stands ready to continue doing well.
Varonis Systems, Inc. (VRNS), which grew 120% in 2020, offers its customers managed threat detection and response services. According to analysts, Varonis is poised to take advantage of higher spending as it focuses on governance and compliance. Just last week the company’s Varonis Data Security Platform received Common Criteria certification from the National Information Assurance Partnership (NIAP), a US government security standards initiative.
Qualys, Inc. (QLYS), a company founded in 1999, is up 48% that year. The company, which specializes in cloud-based IT and security solutions, was presented last month Qualys Runtime Container Security, which provides “critical file access monitoring and blocking, network microsegmentation, vulnerability and exploit mitigation, and virtual patching”. The company has more than 15,700 active customers in over 130 countries.
FireEye, another cloud-based cybersecurity company, took one of the most public and proactive positions on the latest attack. The Company moved quickly to address the hack by releasing countermeasure tools. In his interview with CBS “Face the Nation”, the CEO also called for clear consequences for the perpetrators of cyber attacks to be defined. Many cyberattacks in recent years have occurred without major retaliation by the US government. FireEye stock is up 46% this year.