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Time to Boost Cybersecurity ETF Exposure as AI Safety Concerns Rise
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Key Takeaways
Rising AI safety concerns could create another tailwind for cybersecurity stocks.
Growing AI risks could drive greater cybersecurity spending across businesses.
Cybersecurity ETFs offer diversified exposure to a sector benefiting from rising AI risks.
Investor concerns over the sustainability of rising AI investments appear to be taking a new turn as AI safety concerns gain momentum, with major tech leaders calling for a more measured pace of AI development. Anthropic CEO Dario Amodei called for a slower pace of advanced AI development over the weekend, with OpenAI CEO Sam Altman and SpaceX CEO Elon Musk also backing the call.
A slowdown is expected to have broader market implications given the rapid pace of adoption, accelerating infrastructure buildout and massive capital investments underpinning the AI ecosystem. However, cybersecurity could emerge as a key beneficiary of growing AI safety concerns. As greater emphasis is placed on AI safety and protection against emerging AI threats, cybersecurity firms could be well positioned to benefit.
Major cybersecurity players, including Okta (OKTA - Free Report) , CrowdStrike (CRWD - Free Report) and Palo Alto Networks (PANW - Free Report) , posted double-digit gains on Monday, rising around 12%, 14% and 13%, respectively. Having already gained alongside the broader AI boom, these companies could see another wave of demand as efforts to secure AI infrastructure and mitigate AI-related risks increase.
CRWD CEO George Kurtz echoed this view, noting that the security risks posed by increasingly powerful AI models would persist even if development slows. As quoted on CNBC, Kurtz pointed out that the need for cybersecurity will not diminish simply because AI development slows, as potentially dangerous models are already being used. He also stressed the growing importance of using AI to combat AI-driven cyber threats.
The environment for cybersecurity stocks has remained favorable. The S&P Kensho Cyber Security Index, which tracks companies with significant exposure to cybersecurity-related activities, has gained around 6.6% this quarter, bringing its year-to-date gain to an impressive 39.6%. The strong performance highlights growing investor interest in cybersecurity and the sector’s increasing appeal as an investment theme.
The outlook for cybersecurity appears even more promising amid rising AI safety concerns.
AI Safety Concerns Add to Cybersecurity’s Bull Case
If anything, rising concerns over AI safety could make cybersecurity investments even more crucial. As Amodei and others highlight, the growing risks associated with AI, securing AI infrastructure and protecting against AI-driven threats are likely to become greater priorities for businesses and economies alike. This could create an additional tailwind for cybersecurity companies.
At the same time, calls for a slowdown do not necessarily signal the end of AI development, something both Amodei and Altman have emphasized. The goal is not to halt AI development altogether, but to pursue a more measured approach with greater emphasis on safety, regulation and responsible deployment.
Companies are therefore likely to continue investing in AI, although the pace of development and spending could moderate. Importantly, this shift could support continued demand for cybersecurity solutions as organizations seek to secure increasingly complex AI infrastructure and protect against emerging threats.
With AI also being used to make cyberattacks more sophisticated and scalable, the case for cybersecurity remains compelling. Against this backdrop, cybersecurity ETFs could continue to offer investors an attractive way to gain exposure to the cybersecurity market.
ETFs to Invest in Cybersecurity
This backdrop highlights why cybersecurity funds deserve a place on investors’ radar, regardless of their outlook on the AI trade.
For investors looking to increase their exposure to cybersecurity, ETFs offer a convenient way to gain diversified access to the broader sector. This approach spreads exposure across multiple cybersecurity companies positioned to benefit from rising investments and growing demand for protection against emerging cyber threats.
Here are a few cybersecurity ETFs worth considering for investors looking to capitalize on the sector’s growth potential.
First Trust NASDAQ Cybersecurity ETF seeks to track the performance of the Nasdaq CTA Cybersecurity Index. The fund charges an annual fee of 0.58% and has an asset base of $15.25 billion. CIBR has a one-month average trading volume of about 1.64 million shares and a dividend yield of 0.39%.
Amplify Cybersecurity ETF seeks to track the performance of the Nasdaq ISE Cyber Security Select Index. The fund charges an annual fee of 0.60% and has an asset base of $2.85 billion. HACK has a one-month average trading volume of about 302,000 shares and a dividend yield of 0.05%.
Global X Cybersecurity ETF seeks to track the performance of Indxx Cybersecurity Index. The fund charges an annual fee of 0.50% and has an asset base of $1.56 billion. BUG has a one-month average trading volume of about 1.34 million shares and a dividend yield of 0.03%.
iShares Cybersecurity & Tech ETF seeks to track the performance of NYSE FactSet Global Cyber Security Index. The fund charges an annual fee of 0.47% and has an asset base of $1.05 billion. IHAK has a one-month average trading volume of about 143,000 shares and a dividend yield of 0.07%.
WisdomTree Cybersecurity Fund seeks to track the performance of WisdomTree Team8 Cybersecurity Index. The fund charges an annual fee of 0.45% and has an asset base of $134 million. WCBR has a one-month average trading volume of about 64,000 shares.
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Time to Boost Cybersecurity ETF Exposure as AI Safety Concerns Rise
Key Takeaways
Investor concerns over the sustainability of rising AI investments appear to be taking a new turn as AI safety concerns gain momentum, with major tech leaders calling for a more measured pace of AI development. Anthropic CEO Dario Amodei called for a slower pace of advanced AI development over the weekend, with OpenAI CEO Sam Altman and SpaceX CEO Elon Musk also backing the call.
A slowdown is expected to have broader market implications given the rapid pace of adoption, accelerating infrastructure buildout and massive capital investments underpinning the AI ecosystem. However, cybersecurity could emerge as a key beneficiary of growing AI safety concerns. As greater emphasis is placed on AI safety and protection against emerging AI threats, cybersecurity firms could be well positioned to benefit.
Major cybersecurity players, including Okta (OKTA - Free Report) , CrowdStrike (CRWD - Free Report) and Palo Alto Networks (PANW - Free Report) , posted double-digit gains on Monday, rising around 12%, 14% and 13%, respectively. Having already gained alongside the broader AI boom, these companies could see another wave of demand as efforts to secure AI infrastructure and mitigate AI-related risks increase.
CRWD CEO George Kurtz echoed this view, noting that the security risks posed by increasingly powerful AI models would persist even if development slows. As quoted on CNBC, Kurtz pointed out that the need for cybersecurity will not diminish simply because AI development slows, as potentially dangerous models are already being used. He also stressed the growing importance of using AI to combat AI-driven cyber threats.
The environment for cybersecurity stocks has remained favorable. The S&P Kensho Cyber Security Index, which tracks companies with significant exposure to cybersecurity-related activities, has gained around 6.6% this quarter, bringing its year-to-date gain to an impressive 39.6%. The strong performance highlights growing investor interest in cybersecurity and the sector’s increasing appeal as an investment theme.
The outlook for cybersecurity appears even more promising amid rising AI safety concerns.
AI Safety Concerns Add to Cybersecurity’s Bull Case
If anything, rising concerns over AI safety could make cybersecurity investments even more crucial. As Amodei and others highlight, the growing risks associated with AI, securing AI infrastructure and protecting against AI-driven threats are likely to become greater priorities for businesses and economies alike. This could create an additional tailwind for cybersecurity companies.
At the same time, calls for a slowdown do not necessarily signal the end of AI development, something both Amodei and Altman have emphasized. The goal is not to halt AI development altogether, but to pursue a more measured approach with greater emphasis on safety, regulation and responsible deployment.
Companies are therefore likely to continue investing in AI, although the pace of development and spending could moderate. Importantly, this shift could support continued demand for cybersecurity solutions as organizations seek to secure increasingly complex AI infrastructure and protect against emerging threats.
With AI also being used to make cyberattacks more sophisticated and scalable, the case for cybersecurity remains compelling. Against this backdrop, cybersecurity ETFs could continue to offer investors an attractive way to gain exposure to the cybersecurity market.
ETFs to Invest in Cybersecurity
This backdrop highlights why cybersecurity funds deserve a place on investors’ radar, regardless of their outlook on the AI trade.
For investors looking to increase their exposure to cybersecurity, ETFs offer a convenient way to gain diversified access to the broader sector. This approach spreads exposure across multiple cybersecurity companies positioned to benefit from rising investments and growing demand for protection against emerging cyber threats.
Here are a few cybersecurity ETFs worth considering for investors looking to capitalize on the sector’s growth potential.
First Trust NASDAQ Cybersecurity ETF (CIBR - Free Report)
First Trust NASDAQ Cybersecurity ETF seeks to track the performance of the Nasdaq CTA Cybersecurity Index. The fund charges an annual fee of 0.58% and has an asset base of $15.25 billion. CIBR has a one-month average trading volume of about 1.64 million shares and a dividend yield of 0.39%.
Amplify Cybersecurity ETF (HACK - Free Report)
Amplify Cybersecurity ETF seeks to track the performance of the Nasdaq ISE Cyber Security Select Index. The fund charges an annual fee of 0.60% and has an asset base of $2.85 billion. HACK has a one-month average trading volume of about 302,000 shares and a dividend yield of 0.05%.
Global X Cybersecurity ETF (BUG - Free Report)
Global X Cybersecurity ETF seeks to track the performance of Indxx Cybersecurity Index. The fund charges an annual fee of 0.50% and has an asset base of $1.56 billion. BUG has a one-month average trading volume of about 1.34 million shares and a dividend yield of 0.03%.
iShares Cybersecurity & Tech ETF (IHAK - Free Report)
iShares Cybersecurity & Tech ETF seeks to track the performance of NYSE FactSet Global Cyber Security Index. The fund charges an annual fee of 0.47% and has an asset base of $1.05 billion. IHAK has a one-month average trading volume of about 143,000 shares and a dividend yield of 0.07%.
WisdomTreeCybersecurity Fund (WCBR - Free Report)
WisdomTree Cybersecurity Fund seeks to track the performance of WisdomTree Team8 Cybersecurity Index. The fund charges an annual fee of 0.45% and has an asset base of $134 million. WCBR has a one-month average trading volume of about 64,000 shares.