7 Greatest-Performing Cybersecurity Shares as of September 2024

Within the early hours of July 19, cybersecurity firm CrowdStrike (CRWD) printed a defective software program replace that briefly disabled greater than 8.5 million PCs that use its companies.

The outage brought about chaos throughout banking, airways, well being care and several other different industries, and it despatched CrowdStrike shares plummeting greater than 20% over the next two buying and selling days.

It additionally drew consideration to the significance of dependable cybersecurity firms — and to the potential volatility of cybersecurity shares.

Cybersecurity shares are shares of publicly-traded firms that defend laptop methods from digital threats.

Some, corresponding to CrowdStrike, Fortinet and Palo Alto Networks, are fully targeted on cybersecurity, whereas others, corresponding to Datadog, Cisco, Broadcom and Dell, are diversified expertise firms that present cybersecurity companies together with different choices.

In line with Roosevelt Bowman, an funding strategist with Bernstein Non-public Wealth Administration, the impact of main technical outages on cybersecurity firms is difficult to foretell. “It’s not typically that you simply see a single occasion ‘doom’ an organization,” Bowman says. Nevertheless, he described two methods through which a bad-news occasion corresponding to an outage can push down a inventory’s worth in the long run.

The primary is that if the occasion in query pushes down an organization’s anticipated future earnings to a degree the place it seems to be too costly at its present worth.

The second manner through which a scandal corresponding to a technical outage can harm the long-term trajectory of a inventory, in line with Bowman, is that if there are “subsequent failures.” CrowdStrike’s software program has been linked with minor laptop outages earlier than, though it has by no means skilled an outage on the size of the July 19 incident. Solely time will inform if it might rebuild its fame from right here.

Beneath are the seven best-performing shares within the Nasdaq CTA Cybersecurity Index that commerce on main U.S. exchanges, ranked by one-year efficiency.

Supply: Finviz. Information is present as of Sep. 24, 2024, and for informational functions solely.

Bowman says that his agency is “following” cybersecurity shares, in mild of the rising quantity of client information that must be shielded from threats. He notes that the shift from in-person buying to on-line buying during the last decade has created “alternative” for the business.

You’ll want a brokerage account to purchase cybersecurity shares — and also you’ll additionally want to decide on between shopping for particular person cybersecurity shares, like those proven within the tables above, or cybersecurity exchange-traded funds (ETFs).

There are 4 cybersecurity ETFs with not less than $500 million in property available on the market at the moment. They’re listed beneath so as of one-year efficiency.

Supply: Finviz. Information is present as of Sep. 24, 2024, and for informational functions solely.

Every of those ETFs offers traders publicity to dozens of cybersecurity shares with a single buy.

Nevertheless, it’s nonetheless necessary to analysis an ETF, simply as you’d analysis shares, earlier than shopping for. Take a look at a fund’s charges and holdings to ensure it’s an excellent match to your portfolio.