1Yr

They are probably all healthy - they are just at different stages - some are still striving for strong growth in order to have the greatest possible operating leverage later on, others are turning the profitability screw because less growth is possible. I find it difficult to identify a real moat, as some are fishing in different waters. PS: and $NET is not a real cyber security company. My favs are Crowdstrike, Palo Alto and (Cloudflare)

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Alexxela@Alexxela

1Yr

@Krush82 I have added $S to my portfolio - the plan was $CRWD
I estimate the growth potential at $S to be greater...
$CYBR should also be a good candidate

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1Yr

@Krush82 I've also been thinking about Cloudflare and Crowdstrike in particular for many years (less so about Palo Alto) but have never really been able to motivate myself to buy them because I don't understand the industry that well.

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1Yr

@WarrenG If you can't make up your mind or don't want to delve any further into the matter, the Cyber Security etf from wisdom tree is not a bad choice.

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1Yr

@Krush82 However, I also take a critical view of such thematic ETFs. The ETF is linked to ESG criteria (garbage) and is also not simply passively weighted according to market cap but according to the "focus score" of an external management consultant and sales growth (also garbage).

I'd rather bet on stocks that I can evaluate according to value investing and GARP models (Fortinet) to play on the topic or hope that at some point a clever analysis will appear on YouTube explaining for dummies what actually distinguishes Crowdstrike and Cloudflare.

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Lucrash@KapriolenCapital

1Yr

@Krush82 Cloudflare is a cybersecurity company. WAF, DDOS Protection, DNS Security and Zero Trust solutions clearly speak for themselves.

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1Yr

@WarrenG The way the etf is put together, you have all the relevant players in one basket. You can't complain about the weighting either, as the performance shows.

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1Yr

@KapriolenCapital I am also partly familiar with this. For me, however, cliudflare is mainly Internet infrastructure, i.e. CDN, which ensures that content can be transported quickly and reliably

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1Yr

@Alexxela Where exactly do you see growth potential? In direct comparison with Crowdstrike, I don't see it. SentinelOne's latest revenue growth was 42% (35% CRWD), although SentinelOne only generates 1/4 of Crowdstrike's revenue. They will have to maintain or increase the 42% growth for a damn long time to reach a similar level. The operating margin is still almost -50% (CRWD minimally positive). If they want to move further towards profitability, sales growth will slow down. Cash flow also still looks negative. The share is valued more favorably than Crowdstrike, but that has its reasons. I'm looking forward to the next earnings.

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Alexxela@Alexxela

1Yr

@Krush82 I'm not an IT expert, but from what I've read on the internet, both companies offer similarly good solutions. in the case of $S, both marketcap and revenue are around 1/10 that of $CRWD, so growth may be faster and greater.
In addition, unlike $S, $CRWD is a cloud solution - and there could be more competition in this area, e.g. from $MSFT (at least according to analysts etc.)
These were my reasons for saying that I see more growth potential.

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Tenbagger2024@Tenbagger2024

1Yr

@Alexxela The decisive factor is not whether the product(s) is/are better than the others, but how this is reflected in the company's results/growth. That's true about the market cap, but the turnover is 1/4, not 1/10 of crowdstrike. You can see that they are currently only growing at 42%. The lower the turnover in absolute figures, the faster they should be growing. But they are not. Micorsoft is currently focusing on Azure and AI, they are not really going to attack here now

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Staatsmann@Staatsmann

1Yr

In principle, I find $PLTR Palantir interesting, as the main customer group "governments" in particular are dependent on external know-how and have the deepest pockets compared to companies...

I sometimes don't quite understand the products or business models of some other providers.

AI in particular will probably have a big impact on the sector!
Firstly because the attack techniques will become more sophisticated, but also because learning systems can become more secure.
(Keyword "Skynet" to draw a comparison with a pop culture movie).

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Cristiano@Rocketman_23

1Yr

I have Zscaler and Crowdstrike ✌️

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Pezi@Pezi

1Yr

Not just cyber security, but worth a look in my opinion $BAH

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1Yr

@Pezi
It's been on my watch for some time.
In contrast to Palantir, the share is a bargain.
The company is 110 years old and therefore the risk should be rather low.
I am still waiting for a valuation from a friend.

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1Yr

$NET I take a very critical view. I consider their moat to be small. They have data centers all over the world and use them to distribute content. Many hosting companies such as $IOS use this and thus save on DDoS protection costs.

But: If Microsoft or Google use their existing data centers to offer the same service tomorrow, the difficulty of switching is manageable. And they have the know-how, because they already offer something like this within their own cloud services.

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1Yr

@devnerd_daddy Strong explanation, I can work with that

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1Yr

@devnerd_daddy But Cloudflare doesn't just do cybersecurity

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1Yr

@User03 They actually only do CDN.

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1Yr

@devnerd_daddy Yes, cyber security is only a very small part of it, CDNs are primarily there to get the data from A to B faster and they already have some advantages due to their large network to reduce the transmission distance. Security is actually only a very small part of it in my opinion

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1Yr

@User03 I may have misunderstood and you don't mean the point about security, but I do see an advantage over other companies here

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1Yr

@User03 What I mean is that their only strength, namely the CDN, can easily be copied by Microsoft or Google. In the end, the data centers only cache data and that's exactly what every cloud provider does with geo-redundant data centers. So the moat is very weak.

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1Yr

@devnerd_daddy Now I've understood it and yes, that could be the case, it's just a question of which products ultimately bring more to the end user

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1Yr

@devnerd_daddy Hey Devnerd, what would be your favorites?

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finance_noob2000@finance_noob2000

1Yr

@WarrenG I honestly admit that I don't know the others that well. I know Cloudflare because I worked with them professionally and have been following what they do on the side ever since. I also have a lot to do with Azure, hence the parallels with Microsoft.

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1Yr

To explain this: all clouds have CDN, the one from AWS is called Cloudfront, for example, and distributes static content (website etc.) to so-called edge zones (e.g. data centers in Frankfurt, edge zone / cache in Hamburg) so that you can surf quickly. The whole thing worldwide. In addition, they have DDoS protection etc. by means of firewalls, which they all have as they are. Cloudflare is just a little better at what they do: https://www.cloudflare.com/de-de/cloudflare-vs-cloudfront/ but they don't have a huge moat. If I'm on AWS anyway, I use Cloudfront, i.e. the AWS native CDN.

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Siytta@Siytta

1Yr

I have the most to do with products from $SPLK and $PANW.

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Siytta@Siytta

1Yr

@Siytta The SIEM solution from $SPLK feels like it has an immense moat. Hardly any of our customers rely on competitor products and a subsequent change is probably too expensive for most of them

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1Yr

@Siytta What is that?

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K@TechNav

1Yr

$XAIX You are well covered in this sector.

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1Yr

@TechNav To what extent does an AI ETF cover the topic of cybersecurity?

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K@TechNav

1Yr

@WarrenG Take a look at the index key figures for this ETF. There you will clearly read "exposure to themes related to among others AI, big data and cyber security", i.e. also a focus on data security. Companies such as $PANW, $CRWD, $FTNT, $ZS etc. are all included.

https://etf.dws.com/en-lu/IE00BGV5VN51-artificial-intelligence-big-data-ucits-etf-1c/

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1Yr

@TechNav Of the FIVE top positions in this ETF, I have FOUR in my own portfolio among the top five positions. So this doesn't help me at all. Apart from that, this ETF is again full of ESG drivel.

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Fabian@Sxyxys

1Yr

$ZS At Zscaler, the MACD line broke through the signal today and the RSI value of 36 is also low. I am getting in. What do you think?

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