In the AI Era, Security Stocks Gain Attention... Rising Rally

New Forms of Cyber Attack Threats Emerging with AI Technology Advancement
Increased Demand for Security Investment as Government and Companies Prepare for Cyber Threats
Growth Expected with Leading Technology of Major Domestic Security Firms

Stocks related to artificial intelligence (AI) have been continuing their upward rally in the domestic stock market since the beginning of the year. The stock prices of listed companies aiming to integrate AI technology into daily life, as well as those producing equipment necessary for manufacturing AI semiconductors, have surged sharply. Among the industries expected to grow rapidly in the AI era, the cybersecurity industry cannot be overlooked. Market experts predict that as AI technology advances, the importance of cybersecurity will also increase.

According to the financial investment industry on the 23rd, the stock price of cybersecurity company Genieons rose 34% from December last year to the day before. Data security company FASOO's stock price increased by 19% during the same period. While the KOSDAQ index remained stagnant, the stock prices of cybersecurity companies have continued an upward trend.

Shim Ji-hyun, a researcher at Shinhan Investment Corp., said, "With the advent of AI, demand for cybersecurity will rapidly increase," adding, "Cyberattacks that were previously impossible due to resource or time constraints have become feasible with AI development." She further explained, "The emerging areas in cybersecurity are cloud security and endpoint detection and response (EDR) security," noting, "As the scale of data within the cyber environment grows exponentially, the importance of security will increase."

Eugene Investment & Securities forecasts that the global EDR market will grow at an average annual rate of 24.8% from 2022 to 2028. This is why Genieons, the leading company in the domestic EDR market share, is gaining attention. Recently, the government and major public institutions in Korea have been rushing to adopt EDR to respond to new forms of cyber threats. EDR, which stands for endpoint detection and response, is a security solution that monitors user behavior and internal PC activity to detect and respond to unknown cyber threats.

A representative from Genieons stated, "Cyberattacks are becoming more sophisticated," adding, "The government is working on policy and system improvements regarding cyber threats, and as public institutions actively consider adopting EDR, we expect the market to grow significantly."

Shim Ui-seop, a researcher at NH Investment & Securities, analyzed, "According to the Ministry of Science and ICT, a cybersecurity fund creation project has been added to this year's major budget projects," and "The budget for building an integrated cybersecurity platform will also increase to strengthen the competitiveness of the information protection industry."

FASOO is leading the way in supporting its clients with AI technology under the slogan 'Making AI easy and simple.' It has positioned 'AI-Ready Security,' which helps ensure safe AI usage, as a detailed strategy. Jo Gyu-gon, CEO of FASOO, said, "The emergence of generative AI is bringing about a massive change that will completely transform our lives," adding, "FASOO will grow into an AI company that supports AI utilization for customers worldwide."

FASOO proposes a data security platform for zero-trust-based security. FASOO's data security platform assigns unique identification codes to various data management solutions and manages data in an integrated manner. An Joo-won, a researcher at DS Investment & Securities, said, "Zero trust is a new security system that repeatedly verifies identity from system access to data viewing," and expressed expectations that "as the importance of information security grows, FASOO will benefit."

Cybersecurity companies' corporate values are also increasing overseas. The global EDR company CrowdStrike's stock is trading at a price-to-earnings ratio (PER) of about 70 times. Its stock price has risen nearly 200% over the past year, pushing its market capitalization beyond 90 trillion won. It generates revenue through a subscription-based Software as a Service (SaaS) model.

Researcher Shim Ji-hyun explained, "Despite spending about 200 billion dollars globally on security, security incidents continue to occur," adding, "Security software is still in the early stages of development."