Deutsche Bank expects a "tsunami of demand" for cybersecurity. Which stocks does it recommend?

Investors have not yet fully realized the demand for cybersecurity that the development and adoption of artificial intelligence could generate, according to Deutsche Bank. Its analysts have begun advising clients to buy shares of the cybersecurity firm CrowdStrike. They estimate that over the next 12 months, the stock could rise by nearly 20% from current levels.

On November 2, Deutsche Bank upgraded its recommendation on CrowdStrike shares from “hold” to “buy” and raised its price target from $240 to $300, according to Investing. The new target implies a 19.8% increase in the stock price relative to the last closing price.

Artificial intelligence is expanding the potential size of the cybersecurity market at a pace that a wide range of investors has not yet fully factored into stock prices, noted Deutsche Bank analyst Brad Zelnik. According to him, investors still do not fully appreciate “CrowdStrike’s leadership position on the front lines” of the fight against AI threats, Seeking Alpha reports.

"We are becoming increasingly convinced that the company's total addressable market (TAM) estimate of $565 billion by calendar year 2034 will prove to be conservative, given the 'tsunami' of demand for cybersecurity, which is taking shape as the frontiers of AI continue to advance,” said a Deutsche Bank analyst. “Not all cybersecurity companies will be able to capitalize on this, and we believe that those most clearly tied to AI deserve a significant premium.”

CrowdStrike shares fell 3% during trading on November 2. However, they have risen 109% since the beginning of the year. Despite this growth,

42 of the 57 analysts covering CrowdStrike stock still recommend buying it. 14 analysts advise holding it, and only one recommends selling it.

This article was AI-translated and verified by a human editor