Investing.com -- Morgan Stanley analysts see growing cybersecurity demand as companies face an expanding attack surface and a rising volume of sophisticated threats.
"Growing attack surface area matched with a rising threat environment should sustain cyber demand," the firm noted, emphasizing that cybersecurity is well-positioned to regain its safe-haven status in a volatile market.
Three key factors continue to drive cybersecurity adoption, according to the bank: "Growth of the attack surface area," which expands as businesses integrate more IT assets and users; "Severity of the threat environment," as cyberattacks increase in both frequency and sophistication; and "Expanding regulatory requirements," which compel companies to implement stricter security measures.
Generative AI is expected to accelerate these trends. "GenAI looks to significantly propel the first two drivers mentioned above," Morgan Stanley (NYSE:MS) stated.
However, Morgan Stanley notes that as companies leverage AI-driven applications, they simultaneously expose themselves to new vulnerabilities.
Meanwhile, cybercriminals are using the same AI capabilities to enhance their attack methods.
From a vendor perspective, AI-driven security products are entering a promising growth cycle, said the bank.
"GenAI promises to fuel several interesting product cycles," the analysts explained, highlighting Security Agents that address gaps in Security Operations Centers, next-generation Security Analytics, and Machine Identity frameworks to safeguard autonomous AI agents.
Morgan Stanley remains optimistic about cybersecurity’s resilience in an uncertain economic landscape.
"The broader macro backdrop continues to prove volatile, which likely brings investors back to the more durable demand trends in the Security space," the analysts concluded.