Cyber security growth, AI and valuations: a story in three charts

Today, almost every aspect of our working and personal lives is digitalised. Precious family photos are stored in the cloud, hybrid workers collaborate on projects over virtual private networks, and even essential public services such as water and electricity rely on digital infrastructure.

Near-ubiquitous digitalisation has led to efficiency gains, but it’s also led to a huge increase in cybercrime, and an equally huge increase in the importance of cyber security.

Below are three charts on the trajectory of cybercrime and cyber security investment, the growing role of AI in cyber security solutions, and valuations in the sector.

1. Investment into cyber security is nowhere near the cost of cybercrime

There is a significant mismatch between the cost of cyberattacks and investment in cyber security solutions. Some cyber security segments remain largely underpenetrated following growing demand for cloud security, Internet of Things and operational technology, web security and application security.

2. Rapid growth is forecast for AI cyber security solutions

Fast-paced innovation in artificial intelligence (AI) has boosted the cyber security theme in two ways this year. On one hand, cyber security solutions will need to catch up with AI-powered attacks as they become more numerous and sophisticated. On the other hand, cyber security companies are adopting AI automation to help identify and fight attacks more efficiently.

3. Valuations in the sector are comparatively low

Cyber security stock valuation metrics such as positive PEs and EV/sales are currently positioned towards the bottom end of their range over the past three years. They are also lower than AI peers and lower than or similar to other companies in the Nasdaq index.