China's engagement in hacking U.S. government and corporate data has led the former to violate a crucial bilateral anti-hacking agreement with the latter. The accord was signed between the two nations in 2015, aimed at curbing economic cyber espionage.
Speaking at the Aspen Institute's Cyber Summit on Nov 8, Senior National Security Agency official Rob Joyce said that it "is clear they are well beyond the bounds of the agreement today that was forged between our two countries."
The report comes barely a month after Bloomberg Businessweek claimed that Chinese spy chips were present in numerous American corporate giants' hardware, indicating the seriousness of data breach and sensitive information theft by Chinese hackers.
Thus, the frequency and extent of data breaches in recent times makes cyber security a priority among companies and individuals alike. Therefore it would be prudent to keep a few cyber security stocks in your watch-list.
Chinese Hackers Might Face U.S. Sanctions
The anti-hacking agreement was signed between China's President Xi Jinping and former president Barack Obama in order to refrain both nations from knowingly pursuing cyber-enabled theft of intellectual property or other forms of economic intelligence for commercial gains. Violation of this pact could see Chinese hackers sanctioned by the United States.
However, the agreement didn't put an immediate stop to China's hacking activities. U.S. intelligence and private security experts have noted ongoing cyber breaches by China since 2015, although less frequent.
"While it's not black and white, met the agreement or they didn't meet the agreement, it's clear that they are well beyond the bounds today of the agreement that was forged between our countries," said Joyce, addressing the Asian nation's cyber theft activities.
Although Joyce didn't rule out the idea of China getting hit by U.S. sanctions for their continuing economic espionage in recent times, he believed that reaching the agreement instead of imposing sanctions on Chinese hackers wasn't a bad idea.
"Certainly sanctions are things we've used in context of cyber malfeasance, and we'll continue to use that along with other capabilities," Joyce said.
The two nations are expected to hold a top-level security meet on Nov 9 to address the data breach issue. The latest development puts much strain on the already-stressful U.S.-China relationship; given the ongoing trade war hasn't been resolved yet.
Cyber Security Market Growth Curve
The cyber security industry is associated with shielding confidential data and computers from cyber criminals. The market space comprises improved digital safeguard, better security of cyberspaces and faster reaction time during national emergencies.
According to a market research report by SB Wire , the global cyber security market, that was valued at $105.45 billion in 2015, is expected to witness a compound annual rate of 9.5% in during 2016-2021.
The need for advanced cyber security systems has become imperative in order to tackle China's frequent attempts at confidential government and corporate data theft, thereby making it crucial to keep track of a couple of cyber security stocks.
Cyber Stocks in Focus
We have picked a few Cyber stocks from security that have performed better than the industry this year.
Qualys, Inc.QLYS provides cloud security and compliance solutions that enable organizations to identify security risks to their information technology infrastructures help protect their IT systems and applications from cyber-attacks.
The company carries a Zacks Rank #1 (Strong Buy) and its expected earnings growth rate for the current year is 20.9% compared with the Security industry's projected rise of 12.7%. The Zacks Consensus Estimate for the company's earnings rose 8.7% in the last 60 days.
CyberArk Software Ltd.CYBR provides information technology security solutions. The company offers services which protect organizational privileged accounts from cyber-attacks.
CyberArk carries a Zacks Rank #1 and its Zacks Consensus Estimate for earnings hasn't changed over the past two months for the current year. The company's expected earnings growth rate for the current year is 26.7% compared with the Security industry's projected rise of 12.7%.
You can see the complete list of today's Zacks #1 Rank stocks here .
Fortinet, Inc.FTNT provides network security appliances and Unified Threat Management network security solutions to enterprises, service providers and government entities worldwide.
Fortinet carries a Zacks Rank #3 (Hold) and its expected earnings growth rate for the current year is 68.2% compared with the Security industry's projected rise of 12.7%. The Zacks Consensus Estimate for the company's earnings rose 4.7% in the last 60 days.
Palo Alto Networks, Inc.PANW offers a network security platform that allows enterprises, service providers, and government entities to secure their networks.
Palo Alto carries a Zacks Rank #3 and its Zacks Consensus Estimate for earnings hasn't changed over the past two months for the current year. The company's expected earnings growth rate for the current year is 26% compared with the Security industry's projected rise of 12.7%.
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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free reportFortinet, Inc. (FTNT): Free Stock Analysis ReportQualys, Inc. (QLYS): Free Stock Analysis ReportPalo Alto Networks, Inc. (PANW): Free Stock Analysis ReportCyberArk Software Ltd. (CYBR): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research