Finder is committed to editorial independence. While we receive compensation when you click links to partners, they do not influence our content.
Investing in cybersecurity stocks
What to know before investing in this young but rapidly growing industry that protects against cybercrimes.
Data breaches and hacks can impact the sensitive information of businesses, organizations and individual people. Cybersecurity helps prevent these cyberattacks, and the demand for cybersecurity is expected to soar in the coming years.
What are cybersecurity stocks?
Cybersecurity stocks include companies that offer cybersecurity consultation for businesses and organizations. It also covers cyber recovery solutions if you’ve been a victim of a cyberattack.
Cybersecurity is the art of defending networks, systems and data from digital attacks. These cyberattacks attempt to access information without authorization. They are designed to steal or destroy data, extort money or for other criminal use.
Why invest in cybersecurity stocks?
Cybercrime costs global economies about $600 billion every year, according to the Center for Strategic and International Studies. That’s an increase from the estimated worldwide losses of $445 billion in 2014 and isn’t predicted to decline.
The rise of cyberattacks has prompted public and private organizations to look for solutions to protect themselves from these dangerous and costly breaches. The global cybersecurity market is predicted to grow from $149 billion to $208 billion by 2023, according to a Cybersecurity Global Market Report.
With the growth of cybercrime, firms and governments will turn to cybersecurity companies for help. And since more than half the world is now online and the demand for cybersecurity is more pressing than ever, it might be a good time to invest in cybersecurity stocks.
Risks of investing in cybersecurity
Cybersecurity is a newer industry that got its start with antivirus software and firewalls in the late 80s. Unfortunately, many cybersecurity stocks are based on private companies that are fairly new. And since tech moves fast in the cyber world, smaller, newer companies may struggle to keep up or incur a lot of debt.
Investors may also have trouble gauging winners in the cybersecurity space because the industry is based on hindsight. For example, it is only after a cyber attack that you can definitively evaluate companies and how effective they were in preventing the attack.
The cybersecurity sphere can be volatile as investors and companies are finding their footing.
Cybersecurity stocks cover companies that bolster cyber defenses through various services, including hardware and cloud-based software. Select a company to learn more about what they do and how their stock performs, including market capitalization, the price-to-earnings (P/E) ratio, price/earnings-to-growth (PEG) ratio and dividend yield. While this list includes a selection of the most well-known and popular stocks, it doesn't include every stock available.
What ETFs track the cybersecurity category?
Exchange-traded funds (ETFs) allow you to invest in a spectrum of cybersecurity stocks.
- iShares Cybersecurity and Tech ETF (IHAK)
- ETFMG Prime Cyber Security ETF (HACK)
- First Trust NASDAQ Cybersecurity ETF (CIBR)
- Global X Cybersecurity ETF (BUG)
Compare trading platforms
Take a look at a few trading platforms to invest in this fast-evolving industry.
*Signup bonus information updated weekly.
There are risks associated with investing in cybersecurity stocks. But since the demand for these services isn’t going anywhere, cybersecurity might be a profitable long-term investment.
You’ll need a brokerage account to get started — compare a few trading platforms to invest in data protection.
Frequently asked questions
More guides on Finder
SoFi Invest alternatives
Check out apps like SoFi invest offering many of the same benefits and then some.
Investing strategy: How growth stocks can make you money
Learn how to strategically find and invest in booming companies.
Elon Musk’s Tesla reveals $1.5 billion Bitcoin holding
The electric car-maker’s SEC filing shows it has bought up to $1.5 billion of the leading cryptocurrency in January, and may be investing in more.
What’s happening with GameStop stock, and the dangers of buying in
Retail investors are driving up GameStop’s stock in droves, causing trading service outages and panic among Wall Street hedge fund managers.
Titan Invest review
Invest like a hedge fund with Titan Invest. Learn more.
How to invest during a stock market bubble
If we’re heading into a stock market bubble, you can take some steps to protect your investments.
How investors can cash in on the thriving pet market — fueled by pandemic pet adoption
Here’s what investors need to know about the rising pet market and how to capitalize on its potentially high growth potential.
The new Ark Space Exploration ETF prepares for takeoff — but is it worth the hype?
Ark Investment Management is launching a space exploration ETF. Here’s what we know about the fund and its potential competitors.
Investing goes mainstream, thanks to apps and stimulus checks
New investors, here’s what you need to know before you hit the trade button.
How to invest in blockchain stocks
Comprehensive guide on blockchain stock investing, benefits, risks, main stocks, blockchain ETFs, and more.
Ask an Expert