With increasing cyberattacks and increased cloud security demand, many companies are not good investments. For instance, though we think it could be worth betting on cloud security stocks Mimecast (NASDAQ:) and Qualys (NASDAQ:), which are expected to gain in the near term based on their fundamental strength, conversely, Okta (NASDAQ:) and Rapid7 (NASDAQ:) don’t possess attractive growth potential and we think are best avoided now. Let’s discuss.The remote lifestyle and a rapid digital transformation have led to increasing ransomware attacks and generalized hacking, given the heightened dependency on cloud computing. Investors’ interest in the cloud security space is partly evident in the First Trust NASDAQ Cybersecurity ETF’s (CIBR) 6.5% returns over the past month.

Sophos cybersecurity company estimates that the average cost to recover from ransomware attacks has increased more than twice in one year. It will now cost $1.85million to recover from them in 2021, up from $761,106 for 2020. So, cloud security companies’ products and solutions are expected to be in high demand in the coming months. But, this is not a space where all businesses are likely to succeed.

Based on the quality of their innovations, it might be a smart move to acquire shares in cloud security stocks Mimecast Limited, Inc. (MIME) or Qualys, Inc., Inc. (QLYS). We think that it’s better to stay away from Okta, Inc., (OKTA), and Rapid7, Inc., (RPD) as their short-term prospects are bleak.

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