Date
19 October 2018
Internet security spending is set to increase substantially in the coming years as companies realize the growing threat posed by hackers .Photo: Reuters
Internet security spending is set to increase substantially in the coming years as companies realize the growing threat posed by hackers .Photo: Reuters

Internet security could be the next hot investment theme

The Nasdaq index has been hitting new highs in recent months, prompting investors to take a fresh look at technology plays. The question now is this: which specific segment within the sector should one bet on?

Broadly, major themes like artificial intelligence, cloud, big data have been around for quite some time. So, where does the opportunity lie now? Well, how about internet security?

Talking about internet security, we have to say a few words about the legendary hacker Kevin Mitnick.

Mitnick was best known for his hacking into the Department of Defense’s North American Aerospace Defense Command computer at the age of 15.

He then hacked into Pacific Bell voice mail computers at 17 and played around with telephone numbers of millions of households.

Mitnick became the world’s first person who got arrested for hacking. After his release, he continued to hack into some of the most well-guarded systems, including Nokia, Motorola, Sun Microsystems, etc. In 1995, Mitnick was arrested again.

He was almost 40 when he came out this time. Though his passion for hacking remained strong, he changed the approach.

In 2000, Mitnick founded an internet security firm that helps customers find out loopholes in their computer systems by hacking into their systems. Finally, he was able to harness his talent to make a fortune in a legal way.

Over the years, ensuring internet security has become a more demanding task.

In the past, internet companies only stored data of their own or their customers. But now they might store personal information of the public. The data variety has also increased a lot, given netizens’ penchant for putting pictures, videos and other content on the internet. 

As no company can afford to ignore the issue of data protection, internet security spending is set to increase substantially.

If there is news of any serious data leakage, a firm could easily see its share price get halved in no time. Tens of millions or even hundreds of millions of dollars of spending on internet security will be nothing compared with the potential drop in market capitalization.

Given that most AI, cloud or online shopping companies have posted remarkable gains, investors may want to look into the internet security sector to seek out some candidates to diversify their tech portfolios.

This article appeared in the Hong Kong Economic Journal on Sept 17

Translation by Julie Zhu

[Chinese version 中文版]

– Contact us at [email protected]

RC

Columnist at the Hong Kong Economic Journal

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