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    How to Trade the Cyber Threat Surge - 9/23

    Ian Cooper
    Tuesday, September 23, 20256 min read
    How to Trade the Cyber Threat Surge - 9/23

    With Cyber Attacks Getting Worse, Consider These Two Trades


    The world is under siege from cyber criminals — and the attacks are only getting worse.


    After decades of high-profile breaches and billions lost to ransomware, phishing, and infrastructure attacks, you might think governments and corporations would be better prepared. But the truth is sobering: we’re still behind the curve.


    And cyber criminals know it.








    A Growing Wave of Cyberattacks


    The most recent example came in Europe. Collins Aerospace — a check-in technology provider for airlines — was hit with a major cyberattack that rippled through some of the continent’s busiest airports.


    The fallout was immediate:



    • Heathrow, Berlin, and Brussels airports were all affected.




    • By Sunday morning, 38 departures and 33 arrivals had been canceled across the three hubs, according to aviation analytics firm Cirium.




    • On Saturday, another 60 flights had already been canceled.




    The disruption didn’t just inconvenience travelers — it highlighted how vulnerable critical infrastructure remains. If one company’s systems can cause chaos at multiple major airports, imagine the consequences of a more sophisticated or widespread attack.


    And the problem isn’t limited to aviation. Jaguar Land Rover was also forced to extend a pause in production due to a cyberattack. According to the company, its investigation into the breach is still ongoing, and a careful, phased restart of operations will take time. That means lost revenue, damaged brand trust, and frustrated customers.


    Unfortunately, these stories are becoming alarmingly routine. Whether it’s financial services, healthcare, transportation, or government agencies, cyber criminals continue to probe for weaknesses — and find them.



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    Why Attacks Will Only Get Worse


    The uncomfortable reality is that most of the world is still poorly prepared for the scale and sophistication of modern cyber threats.


    A few key reasons why:



    1. Expanding attack surface. With the rise of cloud computing, connected devices, and artificial intelligence, there are simply more entry points for attackers than ever before.




    2. Geopolitical tensions. Nation-state actors are increasingly using cyber warfare as a weapon, targeting critical infrastructure in rival nations.




    3. Financial incentives. Cybercrime is big business. Ransomware payments alone are expected to exceed $30 billion annually by 2030, making it a highly lucrative “industry.”




    4. Lagging defenses. Companies often spend years playing catch-up, while cyber criminals evolve their methods rapidly.




    This mismatch means that cyberattacks will continue to disrupt supply chains, shut down essential services, and cost the global economy hundreds of billions each year.

    Trading the Chaos


    While the threat is grim, there’s another side to the story. Investors can position themselves in companies providing the solutions.


    The need for robust cybersecurity infrastructure has never been greater, and businesses and governments alike are pouring billions into protecting data, networks, and operations. According to recent forecasts, global spending on cybersecurity is expected to exceed $300 billion annually by 2026.


    One of the easiest ways for investors to gain exposure to this trend is through cybersecurity-focused ETFs. These funds hold baskets of companies specializing in cyber defense, software, and hardware — spreading risk while giving investors direct access to the growth of the sector.











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    ETF: Global X Cybersecurity ETF (SYM: BUG)


    The Global X Cybersecurity ETF (SYM: BUG) is designed to capture the growth of the cybersecurity industry by holding companies at the forefront of digital protection.



    • Expense ratio: 0.51%




    • Number of holdings: 24




    • Top holdings include: Zscaler, CrowdStrike, Palo Alto Networks, Check Point Software.




    Since we last mentioned BUG on August 13, the ETF has edged higher from $33.50 to $35.33. That’s a modest move, but with the cybersecurity theme accelerating, we expect the ETF to push aggressively higher.


    The companies inside BUG are leaders in areas like cloud security, endpoint protection, and threat intelligence — the exact tools enterprises need as cyber criminals grow more advanced.


    With Zscaler and CrowdStrike among its largest holdings, BUG provides exposure to firms that are consistently winning enterprise contracts and expanding their platforms.


    ETF: iShares Cybersecurity and Tech ETF (SYM: IHAK)


    Another solid option is the iShares Cybersecurity and Tech ETF (SYM: IHAK).



    • Expense ratio: 0.47%




    • Number of holdings: 33




    • Top holdings include: CyberArk, Varonis Systems, CrowdStrike, Palo Alto Networks.




    IHAK has also been trending higher, moving from $51 in August to $52.96 recently. With demand for cybersecurity solutions only increasing, we expect this ETF to continue climbing.


    What makes IHAK compelling is its diversified mix of hardware, software, and services companies. That means investors get broad exposure to the full ecosystem of cybersecurity, from network firewalls to identity management to advanced threat detection.

    Why ETFs Over Individual Stocks?


    While picking individual winners in cybersecurity can be lucrative, it also comes with risk. Competition in the space is intense, valuations can be volatile, and even strong companies occasionally miss earnings or lose contracts.


    By investing through ETFs like BUG or IHAK, investors gain:



    • Diversification. Exposure to dozens of leading companies.




    • Lower risk. No single company’s stumble derails your investment.




    • Long-term positioning. Both funds align with the secular growth of cybersecurity spending.




    Given that cyberattacks are not slowing down — and governments and corporations are spending aggressively to defend themselves — the long-term growth potential for these ETFs remains strong.



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    Written by Ian Cooper

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