The increasing adoption of Artificial Intelligence (AI) in day-to-day activities of businesses poses great benefits to operations by increasing efficiency but at the same time making companies more vulnerable to cyber-attacks.
As businesses increasingly transition their operations online, the threat of disruptions posed by malware attacks and ransomware becomes evident, highlighting the growing need for cybersecurity.
In today’s digital landscape, cybersecurity plays a dual role: safeguarding organizations from cyber threats and enabling a smooth transition to an expanded online presence. As the digital ecosystem continues to evolve and remain unpredictable, continuous investment in cybersecurity becomes essential.
The Case for Increased Cyber Investment
Given the pervasive impact of globalization and interdependency across sectors, the increasing threat to different sectors becomes a cause of concern, especially the threats to sectors like healthcare, utilities and finance. Increased cyber-attacks on crucial sectors have the potential to disrupt the economic stability of the broader economy.
According to recent data from Check Point Research (CPR), as quoted on Industrial Cyber, the average number of weekly cyberattacks globally, in the healthcare industry, saw a rise of 32% for January to September 2024 compared to the same period last year. North America’s healthcare sector experienced an average of 1,607 weekly attacks, showing a 20% increase, with Latin America marking a 34% increase.
Per Fox Business, American Water, the largest water and wastewater utility in the United States, responsible for services in 14 states and 18 U.S. military installations, revealed on Monday that it had suffered a cyberattack, disrupting customer access to its billing and payment platform.
This underscores the vulnerability of crucial sectors and critical infrastructure to cyberattacks, especially as AI adoption and integration into daily operations accelerate. In today's landscape, increasing cybersecurity spending is vital. Any setbacks to critical infrastructure could have severe consequences for the economy, making robust cybersecurity measures an essential investment.
Cybersecurity Investments Will Rise as Cyberattacks Climb
Digital technology has connected people on an unprecedented scale and speed, simultaneously empowering cyber-attacks, making it more aggressive in terms of frequency and complexity.
According to Exploding Topics, the risk of cyberattacks has significantly escalated in recent years, with someone falling victim to cyberattacks roughly every 11 seconds. North America has recorded a 15% rise in ransomware attacks in 2024.
According to the UN, as quoted on Bank Info Security, cybercrime syndicates in Southeast Asia have created a highly effective cybercrime ecosystem, with cyberattacks becoming increasingly sophisticated. It is estimated that Asian victims of scams and hacking incidents lost between $18 billion and $37 billion in 2023.
The increasing use of attacks by hackers underscores the need for more robust cybersecurity measures, especially given how conflicts are being brought online by the use of digital tools. According to Whatech, the military cybersecurity market is forecast to reach $19.63 billion in 2028 at a CAGR of 8.2%.
ETFs in Focus
The increasing threat of cyber-attacks and the incorporation of AI in everyday business operations underscores the need for more investments in the cybersecurity domain.
The cybersecurity space remains promising, anticipated to witness a CAGR of 14.3% from 2024 to 2032, reaching a valuation of $562.72 billion in 2032, according to Fortune Business Insights. Investors with a long-term horizon can capitalize on increasing investments in the sector.
Below, we highlight a few ETFs for investors to tap into the promising sector.
First Trust NASDAQ Cybersecurity ETF (CIBR)
First Trust NASDAQ Cybersecurity ETF has gained 5.12% over the past three months and 31.11% over the past year.
Amplify Cybersecurity ETF (HACK)
Amplify Cybersecurity ETF has gained 5.63% over the past three months and 32.78% over the past year.
iShares Cybersecurity & Tech ETF (IHAK)
iShares Cybersecurity & Tech ETF has gained 6.26% over the past three months and 26.967% over the past year.
Global X Cybersecurity ETF (BUG)
Global X Cybersecurity ETF has gained 4.76% over the past three months and 27.89% over the past year.
WisdomTree Cybersecurity Fund (WCBR)
WisdomTree Cybersecurity Fund has gained 1.45% over the past three months and 24.60% over the past year.
Themes Cybersecurity ETF (SPAM)
Themes Cybersecurity ETF has gained 1.66% over the past month and 6.22% over the past three months.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.
Get it free >>Amplify Cybersecurity ETF (HACK): ETF Research Reports
First Trust NASDAQ Cybersecurity ETF (CIBR): ETF Research Reports
iShares Cybersecurity and Tech ETF (IHAK): ETF Research Reports
Global X Cybersecurity ETF (BUG): ETF Research Reports
WisdomTree Cybersecurity Fund (WCBR): ETF Research Reports
Themes Cybersecurity ETF (SPAM): ETF Research Reports
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
