While the market has been focused on all technologies that start and end with AI, there are several trends within that space that have yet to reach their full potential. With so much focus on the growth of AI itself, some of the software plays in AI have been overlooked.
One key area has been cybersecurity. 2024 is on track for the worst yet for ransomware attacks. And a massive data breach last week may have compromised billions of personal records.
With that trend in mind, cybersecurity companies may have their work cut out for them. One key player is Palo Alto Networks (PANW).
The cybersecurity player has grown earnings by nearly 160% over the past year, and revenues are up 15%. Both growth trends are likely to continue with rising cyber threats.
While shares look a bit pricey at over 40 times earnings, Palo Alto’s rapid growth should see higher gains ahead.
Action to take: Shares have been trending gradually higher since April, with some sizeable pullbacks along the way. Investors may want to buy a small stake here, and use any weakness to add to that position.
For traders, the November $370 calls, last trading for about $15.80, could see mid-double-digit returns on a further trend higher in PANW shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.