Cybersecurity stocks are in the black for the past year after a jump Monday, as Russian President Vladimir Putin issues veiled threats against countries that aid Ukraine.
Global sanctions grow every day against Russia, well-known for state-sponsored cyberwarfare capacity, as its troops occupy Ukraine. From the beginning, Putin has threatened those countries who try to “impede” Russia’s war with consequences “never seen in history.”
Concern about a rising risk of Russia state-sponsored attacks helped boost the ETFMG Prime Cyber Security ETF
HACK,
more than 3% Monday and into positive territory for the past year, despite struggles elsewhere: The S&P 500 index
SPX,
was off 1% and the tech-heavy Nasdaq Composite Index
COMP,
was down 0.6%.
On Friday, noted cybersecurity expert and journalist Brian Krebs laid out all the ways Russia may resort to cyberwarfare in response to sanctions and how that conflict could escalate. Last year heralded a rise in cyberattacks that disrupted U.S. industries and infrastructure, where Russia is considered one of the leaders in state-sponsored attacks.
Even hacker groups have chosen sides: Ransomware group Conti has reportedly pledged its support for Russia, while the hacker collective known as Anonymous announced on the first day of the invasion it was targeting the Russian government.
Read: Ransomware boom comes from gangs that operate like cloud-software unicorns — ‘a truly incredible business model’
Wedbush analyst Dan Ives said the cybersecurity sector is “poised to surge” because of the cyberwarfare threat.
“With the historical move by the U.S., Europe, and Canada to remove select Russia banks from the SWIFT global financial/messaging system and Russian central bank sanctions, we now expect unfortunately a significant ramp-up of cyberwarfare by Russian nation-state backed organizations over the coming weeks targeting various U.S./ Europe enterprises and government agencies,” Ives said in a note published Monday.
Read: Putin, the usually cool and calculating former-KGB agent, uses Kim Jong Un-level rhetoric — and puts Russia’s forces on high alert
Companies that Ives expects to benefit from increased spending because of the Russian threat are Palo Alto Networks Inc.
PANW,
Zscaler Inc.
ZS,
CrowdStrike Holdings Inc.
CRWD,
Fortinet Inc.
FTNT,
Mandiant Inc.
MNDT,
and Palantir Technologies Inc.
PLTR,
Of those, Zscaler and CrowdStrike led gains on the day, both trading more than 6% higher.
Over the past 12 months, the HACK index is up 2%, but year-to-date it’s fallen nearly 7%.
Gloss