Top tech analyst talks cybersecurity winners and losers

Top tech analyst talks cybersecurity winners and losers

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00:00
our next guest says this hack was a fully preventable failure and he is looking at two cyber security socks that are best positioned to handle this kind of attack joining us now is andrew nowinski senior tech analyst at d.a davidson andrew always great to get your take on things um and specifically the two companies that you think will benefit the most you're looking at them benefiting because of the specific kind of attack that this was on the colonial pipeline yeah hi melissa thanks for having me on again uh yeah so the two stocks i'm recommending off this attack are palo alto and crowdstrike and and eamonn's
00:31
exactly right in his explanation of the type of attack it was no this was not a nation-state attack the malware was developed by a group called dark side executed by their partners yet the damage and the destabilization you know that this attack created was on par with the nation's state capabilities you know the second thing that's really uh different about this attack is that the level of sophistication of this group is pretty frightening and sadly there does not seem to be any sort of repercussions for conducting attacks like this so so the question is how do
01:01
organizations stop attacks like this you know they have they have to develop best in class platform or deploy best in class platforms from the likes of palo alto and crowdstrike a platform approach is the only way to detect and stop a sophisticated attack like this before the damage is done and both palo alto and crowdstrike have best in class platforms that could have stopped this attack uh and also uh prevented the exfiltration of data once they are inside typically andrew how many months after
01:32
an attack or maybe even years after an attack like this do you actually see a crowd strike or palo alto gain business do you see it in their earnings results you know quarter after two quarters after do we see that kind of relationship or no well i think you can go back to a number of the historical attacks we've seen so most recently solar the solar winds attack happened in december uh certainly palo alto and crowdstrike really didn't see any sort of near-term impact to their january quarter results but i think it certainly contributes to
02:02
the pipeline build for the remainder of the year for both those companies now we'll see them reporting their results for their april quarter uh coming up shortly in a few weeks and i think both are actually um you know seeing uh significantly better demand trends than they've seen uh last year at this time in part driven by these attacks so this this most recent ransomware attack absolutely adds to the pipeline uh for for both companies andrew i know the catalyst is never an acquisition target but to me you know look at a name like z scale
02:35
which i think you cover but crowdstrike you know they have a relationship with google i mean any of these companies anywhere from 30 to 50 billion dollars you can get deals done does it make sense for one of these huge tech companies to bolt on a name like you just mentioned a crowd strike absolutely so crowdstrike is really more than just an endpoint security vendor that they're bolting on they really have developed their own platform i wouldn't say it's as extensive as palo alto palo alto is by far the most comprehensive platform but crowdstrike has 19 modules now i think
03:08
at the time of their ipo they had about 10. so they're really covering a vast majority of the threat vectors that a hacking group you know could exploit they can they can cover your end point and they do uh it's a very cloud-centric uh solution so they they can analyze trillions of thread indicators in a matter of seconds up in their threatcraft database so i think it absolutely is i wouldn't really call it a bolt-on per se but it's it's really it augments the uh the platform of of every vendor out there maybe with the exception of palo alto i think palo alto's got a
03:39
fantastic portfolio built up already covering network and points and and cloud andrew great to speak with you thank you thank you andrew nowinski um tim seymour what do you make of these names theoretically it seems like their pipelines now are goosed because of this but um they fall into this high multiple sort of vortex which the markets don't like yeah this is exactly our previous conversation because look crowdstrike they have about nine percent of this 10 billion endpoint market you know fantastic in fact a couple of analysts i think
04:11
compare them to a younger version of palo alto great stuff but not cheap and so this is an environment where uh i think those multiple like if we were having this conversation a year ago off to the races and and again they just reported the numbers are very good 45 revenue growth um not a stock i'm gonna chase here even though uh you know i'd like to say that i mean i i've been a fan of crowdstrike i just don't need to be a fan right now in this marketplace even on this headline yeah 48 uh price the sales dan um quickly where do you stand on
04:41
cyber well i think that this one an attack on a pipeline is pretty interesting think about how much worse it can get we know the israelis just executed an attack on a nuclear plant in iran i mean there's so many other like points of contact where we could have some serious disruption here so this is like this is the black swan i mean this is mr robot sort of stuff right guy um so i mean to me there's always gonna be any demand these services might be 25 or 30 times sales i don't think it's a bolt-on acquisition
05:12
for any of these maybe palo alto definitely not z-scaler or crowdstrike at these valuations though all right shepard smith here thanks for watching cnbc on youtube

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