Big Tech Embraces Trump after Contentious Relationship
Companies Seek Favor with New Administration
Following a period of tension with President Trump during his first term, leading tech companies have made a concerted effort to mend ties with the administration. This was evident at Trump's inauguration, where CEOs from Meta (META), Google (GOOG), and Apple (AAPL) secured prime seating ahead of incoming cabinet members.
"These companies had issues to address and potential risks," said Cloudflare CEO Matthew Prince. "They were willing to engage with the administration to mitigate those concerns."
Cybersecurity Stocks Surge Amid Positive Outlook
Cybersecurity stocks have experienced strong performance since Trump's election in November 2016. Cloudflare has outperformed peers, rising 28% post-election. Fortinet (FTNT) has gained 18%, ZScaler (ZS) has increased 3%, while Palo Alto Networks (PANW) has declined 3%.
Optimism stems from several factors, including Trump's support for the cybersecurity business model, highlighted by the National Cyber Strategy signed in September 2018. Additionally, trends such as AI and potentially more permissive regulations on dealmaking could boost profits and valuation.
Wedbush analyst Dan Ives projects a positive outlook for the sector, with potential growth exceeding 30% over the next year due to cloud and AI growth and M&A activity.
Digital Transformation Drives Cybersecurity Demand
The World Economic Forum's 2025 global cybersecurity outlook report emphasizes the increasing risks associated with a more digital-first world. Companies and governments are facing the need to bolster their cybersecurity measures.
"Cyber espionage and intellectual property theft are top concerns for CEOs," the report states. "45% of cyber leaders are worried about disruption of business processes."