Cybersecurity booms ahead with tempting growth opportunities.

December 18, 2023
1 min read
  • The cybersecurity sector continues to thrive and offer growth potential for investors, with the WisdomTree Cybersecurity Fund (WCBR) experiencing a 63% surge and reaching 52-week highs.
  • Gartner predicts cybersecurity spending could exceed $215 billion in 2024, indicating a significant 14.3% increase from this year’s spending.
  • Key growth areas for cybersecurity expenditures are expected to include data privacy, cloud security, consulting, IT outsourcing, implementation, and hardware support.

The cybersecurity sector remains appealing for investors with steady growth forecasts and attractive trajectory. 2023 has proven to be an eventful year for the sector, with notable cybersecurity incidents like the ransomware attacks on Caesars Entertainment and MGM Resorts International raising the profile and importance of the industry.

The WisdomTree Cybersecurity Fund (WCBR), for example, outperformed the tech-heavy Nasdaq-100 Index and the S&P Information Technology Index, experiencing near 63% growth and establishing around 52-week highs. Despite this growth, the longer-term outlook provides even more potential.

Market insights firm Gartner has projected that cybersecurity spending could surpass $215 billion in 2024, up 14.3% from the current year. These figures indicate an attractive trajectory for the cybersecurity sector and potential growth for corresponding ETFs. This growth is largely driven by the continuous adoption of cloud technologies, hybrid workforces, the use of generative Artificial Intelligence, and evolving regulatory environments, which propel the need for enhanced security and risk management.

Maintaining customer data privacy and avoiding reputational risks are among the key objectives for companies across various industries. Consequently, spending on data privacy and cloud security is expected to rise significantly in the coming years. Gartner predicts that by 2025, almost 75% of the world population will have their personal data protected by modern privacy regulations.

This projected growth in spending isn’t relegated to these areas alone. There is also expected growth in consulting, IT outsourcing, implementation, and hardware support. Some holdings of the WCBR are already providing solutions in these areas.

In summary, cybersecurity spending is becoming increasingly crucial for businesses of all sizes, and proactive measures are usually more cost-effective than reactive ones. This presents an optimistic outlook for the cybersecurity sector and related investments.

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