Investors are juggling a host of risks, including inflation, higher interest rates and commodity market disruptions. Another challenge is the threat of widespread cyber disruption.
Just this week, Russian hackers launched a major cyberattack on Ukraine that crashed the nation’s internet—including connectivity used by its military. And while Europe and the U.S. have largely been unaffected by cyber issues and there is hopes for peace talks, a recent report pointed to disruptions in both Russia and Ukraine that could lead to “collateral damage that is difficult to avoid in cyberspace.”
But this is hardly a new trend. Remember the infamous SolarWinds hack we learned about in early 2021? Or sanctions levied against Russia less than a year ago for cyber meddling related to the U.S. election?
Still, the risk of disruptions because of hacking is very real in 2022. If you’re an investor looking at how to play events like rising rates or energy price inflation, you may want to put cybersecurity on your list of trends to follow with your portfolio.
Not all cyber stocks are equal
Most cybersecurity stocks have outperformed the stock market so far this year. By way of example, leading sector fund the First Trust NASDAQ Cybersecurity ETF
CIBR
is up about 2% while the broader S&P 500
SPX
is still under water through Tuesday. Furthermore, CIBR is up about 28% in the last 12 months vs. about 16% for the S&P in the same period.
With roughly $6.5 billion in assets, this ETF offers a simple, diversified way to get exposure to major cyber stocks.
But some companies in the space have performed much better than others. A big reason is because the previous “risk-on” environment has been replaced by a more subdued outlook in 2022. And with growth falling out of favor in many portfolios, previously highflying stocks that traded for massive multiples of…
(…)
______________________________________________________
You can read this complete story at: https://www.marketwatch.com/amp/story/cyber-stocks-palo-alto-networks-is-a-better-choice-than-buzzy-cloudflare-11648655243
