Global WannaCry Ransomware Attack Results in Security Firms’ Financial Windfall

The attack by the WannaCry ransomware sheds new light on a concerning reality for our interconnected world: All it takes is a computer virus in the hands of ill-intentioned individuals to debilitate companies and governments on a global scale.

While this incident is undoubtedly sobering, it carries with it a silver lining, signifying to potential investors the extent and significance of cybersecurity as a growing business venture.

The PureFunds ISE Cyber Security ETF (HACK), a fund possessing significant shares in many of the leading cybersecurity companies, enjoyed an impressive 3% increase at Monday’s initial trading. Another specialized portfolio or Exchange Traded Fund (ETF), the First Trust NASDAQ Cybersecurity (CIBR), experienced similar success with nearly a 3% rise.

Major cybersecurity companies listed within these indexes, including FireEye (FEYE), Palo Alto Networks (PANW, Tech30), Qualys (QLYS), and Fortinet (FTNT), have all seen a substantial uptick in shares. Returns for these companies, along with several others in the field, are bolstered by mounting concerns about viruses, malware, and other online threats.

In response to this growing demand, both the HACK and CIBR ETFs have surged this year, increasing by about 15% and making a huge jump of 35% over the previous 12 months.

Investors are increasingly drawn to these companies as demand for their products and services surge, reflecting the need for software, monitoring solutions, and other tools that can both mitigate the effects of a cyberattack and prevent future incidence from occurring.

However, the expectations for future sales and earnings growth are also skyrocketing, and investors show little mercy when presented with any signs of momentum plateauing.

Case in point: Shares of two top-tier cybersecurity companies, Symantec (SYMC) and CyberArk (CYBR), witnessed a sharp drop last week when their respective outlooks fell short of Wall Street’s projections. In a fortunate turn of events, Symantec’s stock made a solid recovery following the news of the WannaCry ransomware outbreak. CyberArk’s shares witnessed another drop, but it is still up nearly 20% compared to last year.

Considering the vast scope of the WannaCry attack, which impacted prominent organizations like FedEx, Nissan, and Telefonica – along with government institutions and hospitals – investors seem likely to continue placing their faith in cybersecurity companies. Their products and services will not only be in high demand but integral to safeguarding our digital lives and information for the foreseeable future.
Source: CNN
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