Cybersecurity Threats Continue to Evolve at AI Speed

Imagine you’re employed by an enterprise company and you’re in charge of security.

A decade ago, it was pretty easy to hire talent to manage cybersecurity programs that even state-sponsored hackers were developing.

Now, as AI has progressed, it has created even more challenges. There are certainly a lot of AI coders, engineers, and architects out there, and there are also new generations of cybersecurity out there.

There’s still a gap in security experts that are also AI experts. Stats show that 70% of companies are still struggling to hire talent with the combined skill sets.

Today, these three uniquely AI-powered security threats are the tip of the iceberg:

• Polymorphic Malware: AI can generate malware that constantly changes its code to avoid detection by traditional antivirus signatures.
• Hyper-Realistic Deepfakes: Cybercriminals use AI-generated voice and video to impersonate executives. One major firm recently lost $25 million after employees were deceived by a deepfake video of their CFO.
• Automated Reconnaissance: AI agents can scan entire networks for weaknesses and generate custom exploit scripts far faster than human hackers. 

These are just the newest forms of security breaches. The old ones – phishing, social engineering, viruses, exploited codes, etc. are still around and AI super-charged.

Here’s a broader set of the challenges that await organizations’ security this year.

As far as the kind of stocks to watch in this space, it can be complicated. There are a lot of small companies that may be good in one specific aspect, say zero-trust security, but don’t have the kind of depth and breadth to attract enterprise-level companies or governments.

Here, it’s best to look at the biggest firms that tend to either build their own solutions in-house to new threats or can buy a smaller company with a specific solution to an emerging threat.

This chart gives you a good sense of the current, top long-term cybersecurity firms that have remained dominant sector players for many years.

Each one of these companies has specific strengths. For example, Zscaler is focused on Zero Trust environments.

This sector has been somewhat ignored, as AI has been the big story. The fact is, the more AI expands, the greater the need for these cybersecurity companies. They’ll have their day, which means now is a good time to dip your toe in.