How the US Stock Security Giants Are Mining Gold—New Industry Opportunities in the AI Era

The Investment Hotspot in Cybersecurity under the Wave of Digitalization

Currently, the global economy is facing recession pressures, but one industry is bucking the trend—cybersecurity. With the explosive growth of AI technology, corporate investments in data protection are rapidly increasing. Market data shows that last year, the global cybersecurity market reached $240.27 billion, and it is projected to grow to $345.4 billion by 2026, with a compound annual growth rate (CAGR) of 9.5%. This growth rate is especially valuable in an era of economic slowdown.

The security concerns brought by generative AI are driving companies to adopt defensive investments. As humans and machines, and machines and machines, need to interact over the internet, cybersecurity is no longer optional but a necessity for survival. As TSMC Chairman Liu Deyin stated, the pandemic accelerated digitalization by ten years, and AI may further multiply this trend.

Why Invest in Industry Leaders Instead of Small Companies

In the cybersecurity field involving national security issues, both governments and enterprises tend to prefer industry leaders. This preference has its internal logic: large cybersecurity companies carry higher brand reputation risks but also have more substantial technological investments. Cybersecurity is a “money-burning” industry, with rapid technological advancements requiring continuous large R&D investments, and only top players can maintain a leading edge.

In contrast, if small companies experience a data breach, the losses can be fatal. This determines market stickiness for industry leaders—once chosen, it’s difficult to switch.

Growth Drivers of the Global Cybersecurity Market

Hacker attack methods are constantly evolving, and the threats faced by enterprises are becoming increasingly severe. Industries such as manufacturing, finance, healthcare, retail, transportation, and energy are all accelerating digital transformation, and each cloud application introduces new security challenges.

Notably, the penetration rate of antivirus software has reached 95%, but Endpoint Detection and Response (EDR) usage is only 20%—indicating there is still 80% market growth potential waiting to be tapped.

Analysis of the Three Major U.S. Cybersecurity Giants

Cisco Systems (CSCO): Strategic Shift from Hardware to Services

As a global leader in information and communication technology, Cisco has been in the industry for nearly 40 years. In 2023, Cisco invested $28 billion to acquire data management and security firm Splunk. This move reveals Cisco’s strategic shift—from a pure hardware provider to a service-oriented enterprise.

The key significance of this acquisition is addressing the biggest pain point in AI promotion: balancing data security and transmission efficiency. Generative AI training data is the most valuable asset for enterprises. Combining Splunk’s data management capabilities with Cisco’s existing network transmission advantages creates a comprehensive solution for protection and transmission. Meanwhile, Cisco can develop AI-specific transmission devices to further optimize user experience.

In the long term, although CSCO lacks explosive growth, its fundamentals are stable, making it an ideal defensive investment target.

Fortinet (FTNT): A Blue Ocean Opportunity in the EDR Market

Founded in 2000, Fortinet’s main clients include enterprises, servers, and government agencies. Government endorsement itself is the best advertisement—when private companies see the government using Fortinet’s products, their confidence significantly increases.

FortiGate NGFW is the most widely deployed firewall product globally. However, a more critical opportunity lies in the low penetration rate of EDR. Currently, only 20% of enterprise users have deployed EDR systems, while antivirus penetration is nearly saturated. EDR can utilize AI to automate threat information collection, quickly identify anomalies, and alert teams for response. The widespread adoption of this function will inevitably follow the AI application boom.

Although the company’s stock price has recently declined due to slower growth, this creates an entry opportunity for investors.

CrowdStrike (CRWD): Pioneer in AI Application

CrowdStrike has been using AI technology since its inception, with over ten years of experience. This gives CRWD a clear advantage over later entrants. When companies choose cybersecurity partners, they tend to favor vendors with proven AI effectiveness in the field.

The company is confident about the future, expecting its Annual Recurring Revenue (ARR) to grow by 30% this year. This expectation is supported by its customer structure—over 50% of the Fortune 500 are CRWD clients, and in the highly regulated banking sector, 75% of the top twenty banks use its services.

These figures demonstrate that as AI applications expand, CRWD’s growth ceiling continues to rise.

Final Summary of Investment Logic

Following the trend is the fundamental principle of profitable investing. In the context of a global recession, industries capable of maintaining rapid growth will continue to attract capital. The cybersecurity industry has become even more critical due to AI, which is not only a technological demand but also a strategic necessity.

In the future smart cities, almost all appliances will be connected to the internet; autonomous vehicles will communicate with each other via networks; industry digitalization will deepen continuously. Each of these trends means more information flowing through networks, which in turn means a continuous increase in cybersecurity demand.

Against this backdrop, leading U.S. cybersecurity companies not only offer opportunities for asset appreciation but also allow investors to gain deeper insights into industry development, broadening their investment horizons.