Investors have been given another reason to buy Palo Alto Networks stock, according to Jim Cramer, in light of a cybersecurity incident that affected millions of AT&T customers. The telecommunications giant said Saturday that he was investigating a customer data leak on the dark web that compromised information belonging to 73 million current and former AT&T account holders. This includes sensitive information such as social security numbers, home addresses and dates of birth. But bad news for AT&T may be seen as good news for Club, which owns Palo Alto Networks, as the data leak underscores the need for cybersecurity offerings in an era of widespread digital threats. Microsoft and UnitedHealth Group are among the companies recently involved in high-profile cyber incidents. “Buy Palo Alto on that,” Jim Cramer said Monday. “We like it (the shares.)” AT&T said the incident had no material impact on its operations and that the passcodes of the 7.6 million affected checking account holders had been reset. At the same time, the company said it was contacting all 65.4 million affected former customers. AT&T also said it currently has no evidence that “unauthorized access to its systems” led to the data leak, according to a press release issued Saturday. AT&T did not immediately respond to CNBC’s request for comment on whether it had any new information regarding the data breach. PANW YTD Mountain Annual Performance of Palo Alto Networks (PANW) The list of companies making headlines due to cybersecurity incidents is long. And the growing threat from emboldened hackers has generated business for Palo Alto Networks. UnitedHealth’s Change Healthcare subsidiary was targeted by hackers in February, causing disruptions in patient prescription refills and insurer reimbursements to healthcare providers. Change Healthcare, the largest healthcare payment processor in the United States, is now working with Palo Alto Networks and other cybersecurity companies to investigate what happened and protect its systems, according to UnitedHealth. Holding club Microsoft was also targeted by cybercriminals earlier this year. Microsoft, which has its own cybersecurity business, revealed in January that a Russian intelligence group had attempted to hack its employees’ email accounts. In a note to clients that month, JPMorgan analysts said cybersecurity vendors like Palo Alto Networks could benefit from the incident, suggesting the news “may prompt greater caution regarding a too much dependence on Microsoft for security. The AT&T data breach is the latest sign that cybersecurity solutions are more important than ever and that investors should consider gaining exposure to the sector. Palo Alto Networks is our only cybersecurity stock, although its once hot stock cooled following the release of its February 20 quarterly earnings report. That’s when Palo Alto Networks announced it would move toward a so-called “platformization” strategy, providing a unified cybersecurity platform to accelerate industry consolidation. Under this strategy, the company would effectively give away certain technologies for free for a certain period of time. While CEO Nikesh Arora claimed that this would help strengthen Palo Alto’s advantage over its peers, the company later cut its full-year revenue and billings guidance, sending shares down 28. 4% in one session, at $261.97 each. Jim argued at the time that Palo Alto’s move represented short-term pain for long-term gains, and we added to our position in Palo Alto Networks on earnings-related weakness. But after enjoying a rally to around $316 on February 28, the stock fell again. It fell 1.66% on Monday to close the session at $279.42 per share. Jim said at last week’s monthly meeting that he was comfortable with Palo Alto’s position in the industry, especially after his recent interview with Arora. “I think after talking with Nikesh, I’m very tempted, when it goes over $280, to buy Palo Alto,” he said. (Jim Cramer’s Charitable Trust is long PANW, MSFT. See here for a complete list of stocks.) As a subscriber to CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after a trade alert is sent before buying or selling a stock in his charity’s portfolio. If Jim talked about a stock on CNBC TV, he waits 72 hours after the trade alert is issued before executing the trade. THE ABOVE INVESTMENT CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, AS WELL AS OUR DISCLAIMER. NO OBLIGATION OR FIDUCIARY OBLIGATION EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTMENT CLUB. NO SPECIFIC RESULTS OR PROFITS ARE GUARANTEED.
In this photo illustration the cybersecurity company Palo Alto Networks logo is seen displayed on a smartphone.
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Investors received another reason to buy shares of Palo Alto Networksaccording to Jim Cramer, in light of a cybersecurity incident that affected millions of people AT&T clients.
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