(Bloomberg) — Shares of cybersecurity software companies rose on Monday, with the group extending its recent outperformance as analysts expect higher spending on security-related services as businesses and companies brace for cyber warfare.
Among exchange-traded funds that track the sector, the Global X Cybersecurity ETF rose 3.8% and gained 13% over the past three sessions, its best three-day rally since December 2020. The First Trust NASDAQ Cybersecurity ETF gained 2.9%, and the ETFMG Prime Cyber Security ETF rose 3%. To compare, the iShares Expanded Tech-Software Sector ETF rose 1% while the tech-heavy Nasdaq 100 Index closed up 0.3%.
Recent interest in the sector has followed Russia’s invasion of Ukraine, which has organizations preparing for possible cyberattacks. Morgan Stanley wrote that the heightened geopolitical interest will push upward pressure on federal cyber budgets. Truist wrote that “the heightened threat environment will continue to provide a strong tailwind for cybersecurity stocks”
While the three ETFs are in negative territory for the year, they have easily outperformed software overall. Technology shares have been pressured by a rise in Treasury yields and the prospect of higher interest rates.
(Updates to market close.)
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