After their bludgeoning by the “SaaSpocalypse,” cybersecurity stocks are on the mend in a big way. The WisdomTree Cybersecurity Fund (WCBR) confirms as much. That ETF, which tracks the WisdomTree Team8 Cybersecurity Index, is up nearly 24% over the past month. Confirming WCBR’s leverage to the theme of rebounding cybersecurity stocks, a 32% rally last week by Fortinent, one of the ETF’s top 10 holdings, stoked the flames of the cybersecurity rebound.
Read more: This Inflation-Fighting ETF Is Right for These Times
“It’s finally nice to see these cybersecurity stocks we have been talking about for so long get the recognition in the marketplace for the type of valuations we think that these companies are worth,” observed Morningstar’s Dave Sekera.
WCBR May Have More in Store
A 24% rally in the span of a month is enough to make some investors ponder whether or not they missed the WCBR boat. However, there’s another side to the story. Some experts believe cybersecurity stocks endured overly severe punishment at the hands of AI disruption earlier this year.
In fact, signs abound of crucial links between AI and cybersecurity. Those signs indicate that these two technologies may prove more partners than competitors. There’s already evidence of that as it relates to some WCBR holdings.
“Palo Alto was invited into Anthropic’s Project Glasswing. I think that really shows how that approval and acknowledgment show that they do have a leadership position in the cybersecurity space, specifically in AI,” noted Sekera. Palo Alto Networks (PANW) is also a top-10 holding in the WisdomTree ETF.
Cybersecurity stocks aren’t recovering in linear fashion. That signals that some names in the group, including some WCBR holdings, still offer value.
“Zscaler…is probably the most undervalued of the stocks. It’s a 5-star-rated stock at a 50% discount…probably most appropriate for higher-risk types of investors, but it is one that was also invited into that Project Glasswing. Okta…16% discount, 4 stars,” concluded Sekera.
Zscaler and Okta are WCBR’s fifth- and 12th-largest holdings, respectively. They combine for more than 9% of the ETF’s portfolio.
For more news, information, and analysis, visit the Modern Alpha Content Hub.
Disclosures
This article was prepared as part of WisdomTree’s general paid sponsorship of VettaFi | ETF Trends. This specific content within and any opinions expressed therein belong solely to VettaFi and do not reflect the opinion or analysis of WisdomTree, its employees, or its affiliates. Content published on VettaFi | ETF Trends is provided for educational purposes only and should not be considered investment or tax advice. For investment or tax advice, please consult a financial professional.
WisdomTree is an independent company, unaffiliated with VettaFi | ETF Trends. WisdomTree has not been involved with the preparation of the content supplied by VettaFi | ETF Trends. It does not guarantee, or assume any responsibility for its content.
