Since our interview with national security expert Shane Harris earlier this year on cybersecurity, interest in this sector of the market has grown tremendously. Some of the companies profiled in his book @War: The Rise of the Military-Internet Complex have already seen large gains in just a few short months as more frequent attacks move the issue of cybersecurity and cyberwar into greater focus.
A notable example of surging interest into this sector can be seen by the recent breakout to new all-time highs in the cybersecurity ETF (HACK), whose top holdings include companies like CyberArk Software (CYBR), FireEye (FEYE), Infoblox (BLOX), Qaulys (QLYS), and others.
With regards to whether this trend should end anytime soon, Shane answered:
"Just in the Defense Department budget, spending on cybersecurity, cyberdefense, and cyberoffense is the only part of the budget that is really growing. And in the private sector too we are seeing a tremendous growth of new companies: startups focused on cybersecurity, big companies acquiring smaller ones...some of the most successful IPOs in the last few years have been cybersecurity firms and there's a demand for this. The Sony attack points out the degree to which even the large global companies are at risk and when those companies get hacked they go hire private firms to make sure they don't get hacked again. So that's what's really driving the market is that the threat really is that big and the consequences to companies' bottom-line is significant if they don't do somthing about it. So, I don't see spending on this abating anytime soon becuase the threat is not abating."
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