Once the market plunge runs its course I think the most successful cyber security stocks will recover and resume their advances, suggests Jim Powell, growth stock expert and editor of Global Changes & Opportunities Report.
One part of the cyber technology competition where the US has fallen behind its rivals is cyber warfare — where computers are used to shut down or corrupt those of an enemy.
Russia, China, Iran and North Korea have all been probing American defense capabilities and our extensive infrastructure — and are probably planting hidden backdoor keys and learning shutdown procedures — for use in case of war.
Adding cyber offense to our cyber defense investments should be hugely profitable for investors who take positions in the leading players, and hold them for the long-term growth they are likely to deliver.
Although many cyber warfare tools are being developed by US military groups, the biggest part of the work is being given to America's leading defense contractors. All of them have significant cyber warfare operations, and they are being generously funded.
The new cyber warfare effort is being given little publicity – and getting information about the topic from the developers is difficult. However, it is clear from reading between the lines of what they are doing in cyber security — that cyber warfare is being given a full court press.
Lockheed Martin (LMT) appears to be the head of the spear in cyber warfare. That should be no surprise since the company is a major producer of defense products, and is a leading developer of cyber security systems to protect them.
Companies that produce sophisticated military products are in the best position to develop the tools needed to defeat those developed by their foreign counterparts.
The most revealing information about Lockheed Martin’s cyber warfare program can be inferred from its “Cyber Kill Chain” security program, which includes the 7 most important steps that offer opportunities to penetrate an adversary’s computer system. I’m confident that Lockheed Martin is developing tools for each of them.
Raytheon (RTN) is also making big strides in cyber warfare. The company is the leader in missiles, a critical part of modern defense systems. Blocking an attacker’s missiles by disrupting their launching and control programs is undoubtedly a priority project at Raytheon.
Raytheon is also noteworthy for regularly monitoring foreign IT networks for threats that may be on the way — and for its vulnerabilities. In addition, Raytheon is using artificial intelligence (AI) to make its systems more effective.
Raytheon doesn’t discuss cyber warfare anywhere in its public literature. The closest it comes to admitting that it is active in the new field is its claim to have “world-class experience in developing solutions for cyberspace operations.” There isn’t really much more than needs to be said to know that Raytheon will play an important role in cyber warfare.
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