The AI rally has gone through several iterations, and the latest is the hardware-to-software rotation. AI’s threat to major software providers was likely always overblown, but it's never been more apparent in the cybersecurity space. Cybersecurity stocks have soared lately as AI agents pose a growing cyber threat, and many companies now treat cybersecurity spending as a non-discretionary budget item.
Cybersecurity ETFs may look interchangeable at first glance, but their performance can diverge meaningfully. The reason isn’t a few basis points of fees—it’s how each portfolio is built. For investors choosing between funds in this space, composition matters far more than the label on the package.
