Info@NationalCyberSecurity
Info@NationalCyberSecurity

Why cybersecurity is a top play during AI race: Strategist | #hacking | #cybersecurity | #infosec | #comptia | #pentest | #ransomware


Tech remains one of the most dominant sectors for Wall Street as Magnificent Seven tech stocks occupy about 27% of the S&P 500’s (^GSPC) market value. AI was at the center of discussion for these companies, with plans on expanding investments in AI to be incorporated into their products and business models.

Hennion & Walsh CIO Kevin Mahn joins Yahoo Finance to discuss why he advises investors to consider tech stocks for 2024 and why cybersecurity stocks will be equally as important when making that consideration.

“I do think what’s been lost in the AI race is the importance of cybersecurity, which I always call the glue that holds the technology puzzle together,” Mahn states. “In fact, many have argued that the proliferation of AI could actually increase the number and the effectiveness of cyberattacks across the world. So you’re going to need more AI to help combat AI-generated cyber attacks.”

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Video Transcript

So Kevin, when you think about then the opportunities that could be popping up, and especially how you’re setting up for 2024, where are you putting new client money, especially when you’re preparing for the expectation of rate cuts?

KEVIN MAHN: Great question, Diane. It really does come down to what those clients objectives are, what their risk tolerance is, and what their investment frame is. If their goal is income, then we would certainly find tremendous opportunities on the fixed income side of the markets right now, in areas such as municipal bonds, or even preferred securities. Many of your listeners might be surprised to know that coming out of the end of rate hike cycles historically, preferred securities have been the best performing fixed income class, with an average annual return of just over 14% in the year following the end of rate hike cycles, which I believe we’re in right now.

In terms of equities, if you’re looking for growth opportunities, certainly we see a lot of potential in the information technology sector. And I don’t dismiss the opportunities that exist in generative artificial intelligence or the transformative nature of AI. But I do think what’s been lost in the AI race is the importance of cybersecurity, which I always call the glue that holds the technology puzzle together. In fact, many have argued that the proliferation of AI could actually increase the number and the effectiveness of cyber attacks across the world.

So you’re going to need more AI to help combat AI-generated cyber attacks. So we see opportunities in the cybersecurity sector. Three stocks that we currently hold within our technology revolution trust here at Smart Trust include CrowdStrike, CyberArk, and Fortinet.

And Kevin, I’m going to get you out here on this. On that same theme of AI, would you be advising people to keep committing capital to some of those names that really become sort of the faces of this boom of interest in AI, like NVIDIA or Microsoft?

KEVIN MAHN: Yeah. Certainly Microsoft, I believe is going to be the ultimate winner of the AI race, but there’ll be more than just one winner. NVIDIA is a critical component to the overall AI ecosystem and they’re going to still experience growth out 5 to 10 years from where we stand right now. But you have to consider valuations and attractive entry points.

So are those areas to invest in? They certainly are. But I believe there’s even more attractive opportunities at more attractive valuations within the AI ecosystem. Especially if you look at some of the data centers, some of the chip plays, the semiconductors, the proliferation of the actual technology itself, there are opportunities, but investors would be wise to do their due diligence as opposed to just investing in a couple of those top-tier, well-recognized names, Josh.

All right. Kevin Mahn, thank you for great insight across the board, whether we’re talking about NVIDIA and Microsoft, to where does the Fed land and when does it declare victory? Thanks so much, Kevin.

KEVIN MAHN: My pleasure. Happy holidays.

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