Innovation Data privacy: Building a more secure future

Investing in data privacy may provide exposure to a growing trend given the increasing importance of protecting personal data in today’s digital age. As technology and digital communication becomes more sophisticated, so are the cybercriminals trying to hack your email and company data.

First, a quick word on the difference between data privacy and cybersecurity. Data privacy is concerned with the proper handling and protection of personal information, ensuring it is used with consent and in compliance with relevant regulations. Meanwhile, cybersecurity focuses on securing networks, systems, and data from cyber threats, ensuring the confidentiality, integrity, and availability of information.

This data privacy arms race has created demand for robust cybersecurity solutions and services. There are nearly 140 countries  with data and consumer privacy laws, while about a quarter of all U.S. states have enacted data privacy laws.¹

For investors, understanding the landscape of data privacy companies, particularly those within the Nasdaq-100® Index, may offer a strategic entry into this growing industry.

The growing importance of data privacy

As mentioned earlier, data privacy refers to the protection of personal information from unauthorized access and misuse. With the increasing volume of data generated daily, safeguarding this information has become more important than ever.

Hacks and cyberattacks are on the rise, eating into companies’ bottom lines and sapping the trust of consumers. Regulations such as the General Data Protection Regulation (GDPR) in Europe and the California Consumer Privacy Act (CCPA) in the U.S. underscore the need for stringent data protection measures.

As more businesses operate online and digital transactions increase, the demand for cybersecurity solutions that ensure data privacy is also expected to rise.

Key Nasdaq-100 companies involved in data privacy

Several companies within the Nasdaq-100 Index offer products and services that help other companies and entities maintain data privacy. Here’s a look at some of the key players:

• Microsoft: The software leader provides data privacy solutions via its cloud platform, which includes a range of tools designed to help firms safeguard sensitive information. It offers encryption, advanced identity and access management, and compliance with global privacy regulations such as GDPR. The firm’s office suite also includes privacy features that help organizations manage data governance and user privacy settings effectively. These solutions are used by organizations that want to bolster their data privacy practices and make sure they’re compliant with international standards.
• Palo Alto Networks: The firm specializes in providing cybersecurity and data privacy solutions that protect organizations from threats while ensuring data integrity and confidentiality. Palo Alto is a leader in providing next-generation firewalls to help secure networks as well as secure access service edge (SASE) solutions and cloud security platforms designed to safeguard data across various environments.
• Fortinet: The company provides comprehensive cybersecurity solutions that include data privacy protection through its FortiGate next-generation firewalls and FortiClient endpoint protection. Fortinet’s security architecture integrates security across various network environments, ensuring data privacy and compliance with regulatory requirements. Many companies and agencies rely on Fortinet as a vendor to protect critical data and infrastructure from threats​.
• Cisco: The firm, which has been around since the mid-1980s, offers a range of data privacy and security solutions, including secure networking, cloud security, and advanced threat protection.

Accessing data privacy with QQQ

For investors seeking exposure to the data privacy theme, Invesco QQQ ETF (QQQ) is one option to consider. QQQ tracks the Nasdaq-100, which includes many of the top technology and innovation-driven companies, such as those involved in cybersecurity and data protection.

Data privacy is more than just a trend; it’s a strategic move to capitalize on the increasing need for security in our increasingly digital world.

Key takeaways

• Data privacy may provide exposure to a growing trend given the increasing importance of protecting personal data in today’s digital age.
• Regulations such as the GDPR in Europe and the CCPA in the U.S. underscore the need for stringent data protection measures.
• QQQ is one way to get exposure to the digital privacy trend that also includes some of the world’s most innovative companies.