Artificial intelligence (AI) has more potential to change the world than any technology in history. Private company OpenAI lit the fuse earlier this year with its ChatGPT online chatbot, which has the capability to answer complex questions and even write computer code.
Nvidia CEO Jensen Huang has called it the iPhone moment for AI -- in other words, the way people live, work, and interact is about to change forever.
AI will impact almost every industry, but perhaps none is more important right now than cybersecurity. Since AI marks a new era in digital ecosystems, advanced protection is going to become more crucial than ever. With that in mind, here are two companies offering AI-powered cybersecurity solutions, and investors might want to keep a very close eye on them.
1. CrowdStrike's AI models ingest 2 trillion events per day
In any organization, big or small, there are some things employees don't want to do (like read emails after hours), and there are some things they simply can't do (like constantly monitor for cyber threats). But with the workforce increasingly operating online using cloud computing technology, it's critical that companies' valuable digital assets are protected around the clock. And for 23,019 businesses, that protection is provided by CrowdStrike (CRWD -0.44%).
CrowdStrike is a widely recognized leader in endpoint protection, which refers to the devices employees use to access and complete their jobs each day. But the company has a portfolio of services that include cloud protection, identity protection, and security operations, so it's a one-stop shop for most businesses.
CrowdStrike focuses on the endpoint for a very good reason: It's where 90% of successful cyber-attacks and 70% of successful data breaches originate. As a result, it's also where CrowdStrike collects 80% of its most valuable security data. The fact is, employees are easy targets because of their varied workloads. Hackers can breach their devices through emails, phone calls, messaging systems, or even their online purchases.
As I mentioned, it's impossible to expect workers to always watch for cyber threats. That's why automation is key, and artificial intelligence is the perfect technology to power it. CrowdStrike's AI models ingest more than 2 trillion events per day, and they make a whopping 180 million indicator of attack decisions per second. As the company acquires more customers, it will collect more data, and its models will grow more advanced.
At the conclusion of fiscal 2023 (ended Jan. 31), CrowdStrike had $2.5 billion in annual recurring revenue (ARR). The company has charted a path to reach $5 billion by fiscal 2026, but that's still a fraction of what it expects will be a $158 billion total addressable market by that time. This is definitely a stock investors should keep on their watchlist, if not buy now for the long-term.
2. SentinelOne doubled its revenue for three straight years
SentinelOne (S 2.36%) places artificial intelligence at the center of its cybersecurity product portfolio. It offers several points of difference to other providers, and the company is growing its revenue and its customer count at a lightning-quick pace.
Its flagship Singularity platform allows businesses to view their entire cybersecurity stack on a single dashboard. From cloud protection to observability to firewalls to identity protection, SentinelOne provides customers with maximum visibility. It helps to ensure rapid response times and enables cross-department collaboration in larger organizations.
While many modern cybersecurity products are cloud-based, SentinelOne takes an "always on" approach. Its protective measures won't drop off if it loses connection to the internet, which is key for endpoints. Plus, thanks to AI, SentinelOne's protection is automated, and it even adds a new dimension to the security landscape. Its hologram tool on Singularity, for example, uses machine learning algorithms to deploy decoys across a customer's network. They mimic live production assets to fool attackers into launching a strike, which is used to further train SentinelOne's AI models to patch potential vulnerabilities.
SentinelOne grew its customer base by 50% in fiscal 2023 (ended Jan. 31) to 10,000, including 905 customers spending at least $100,000 per year with the company. That cohort grew by 74%, signaling higher demand among larger organizations with complex needs.
The company's revenue for the year grew by a whopping 106% to $422 million, which followed a 120% increase in fiscal 2022 and 100% in fiscal 2021. Still, SentinelOne believes its addressable market will be worth $100 billion in the coming years, so if the company can execute, it has plenty of growth ahead.
