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Dave Sekera, chief U.S. market strategist for Morningstar, is bullish on one corner of tech that he says is set to experience “some of the strongest long-term secular growth.” That’s cybersecurity, he told CNBC’s “Squawk Box Asia” on Thursday. “Between geopolitical risks, ransomware and hacking, this is just one area that’s going to have a lot of secular growth,” Sekera said. When it comes to cybersecurity, “management will not be willing to try to cut costs,” he said, as it forms a small percentage of IT budgets and yet companies would incur huge costs if they were to fall to cyber threats. Sekera names one stock that he says is trading at about a 25% discount to Morningstar’s fair value estimates: CrowdStrike . “CRWD is positioned to benefit as clients look to consolidate their cybersecurity coverage to one vendor that has a broad range of security solutions,” he said in a note sent to CNBC. Shares of the U.S. cybersecurity firm are up 11.5% year-to-date, after slumping 48% in 2022. Wall Street is broadly optimistic on CrowdStrike as well, with analysts giving it average potential upside of 36%, according to FactSet. Some 87% of analysts covering the stock have a buy rating on it. Ritholtz Wealth Management CEO Josh Brown also endorsed the firm on Wednesday, saying that it’s one cybersecurity company that has the ability to take market share. Goldman Sachs also recently initiated coverage of the stock with a buy rating. “We expect secular tailwinds in Security to drive budget growth ahead of broader IT spending and broader software over the next decade,” Goldman analyst Gabriela Borges wrote in a note last week. Analysts have struck a bullish tone on cybersecurity of late, arguing that it’s one sector that’s resilient even in a slowdown. — CNBC’s Michelle Fox contributed to this report.
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