Billionaire investor Warren Buffett says many interesting things at the annual Berkshire Hathaway shareholder meeting. The event highlights are always well worth watching on YouTube.

This year, he said something I found striking: “When you think about the potential for scamming people…if I was interested in investing in scamming, it’s gonna be the growth industry of all time and it’s enabled in a way by [artificial intelligence].“

While Buffett is quick to recognise AI’s tremendous potential for good, he’s worried about the increasing manipulation of videos and images (deep-fake technology). He thinks AI will create a massive growth in fraud.

A vital industry

To me, this underscores the rising importance of cybersecurity as an industry. And it shows why investing in fraud/hacking prevention in my portfolio is a smart move.

That’s not to say this is what Buffett is advocating. He’s generally avoided technology stocks, so is unlikely to be investing in cybersecurity companies himself anytime soon.

However, AI is being used to generate highly personalised phishing attacks, bypass security systems, and develop advanced malware. This makes AI-driven cybercrime increasingly dangerous.

A $1.8trn opportunity

Global spending on cybersecurity is expected to exceed $210bn in 2024. Yet research firm McKinsey reckons that comes nowhere close to what’s needed to counteract the projected $9.5trn in damages caused by cybercrime.

It says that companies will end up spending around $2trn annually on cybersecurity. This suggests a near $1.8trn gap to be filled.

Still primed for strong growth

One stock that stands out in the cybersecurity space is CrowdStrike (NASDAQ: CRWD). And yes, I’m talking about the CrowdStrike whose software update caused a global IT outage this summer.

Since that PR disaster, the share price has fallen almost 20%. This reflects the reputational damage it has sustained and the risk to its near-term growth.

In the second quarter, the firm said that deals it expected to sign have been delayed (but not cancelled altogether). It was working on price concessions for some customers. And it expects this to hit its annual recurring revenue by around $60m throughout the rest of the year.

However, stepping back, I think it’s important to remember that the software issue wasn’t a breach of its cybersecurity platform. This uses AI to safeguard endpoints — devices like laptops, desktops, and servers — by detecting, preventing, and responding to attacks in real-time.

The firm’s revenue is still expected to reach nearly $6bn by 2027, a near doubling from last year’s $3.1bn. Profits are also expected to grow significantly over this time.

On the recent earnings call, CFO Burt Podbere said: “When we get to the back half of next year, we’ll start to see an acceleration in the business.”

I find this a very encouraging comment. It suggests that the software debacle might not have any lasting damage on the firm’s long-term growth trajectory.

Trading at 69 times this year’s forecast earnings, the stock is far from cheap. But over the long run, I think the shares look attractive due to the company’s strong competitive position in the booming cybersecurity industry.

If I wasn’t already a shareholder, I’d snap up CrowdStrike stock today.