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Cybersecurity stocks were hit hard last week after Palo Alto Networks Inc. (PANW) lowered its full-year sales guidance, raising concerns about industrywide headwinds. The cybersecurity category had been flying high up until then (the  munKNEE Cybersecurity Software Stocks Index was up 106% in 2023 and was up 18% so far in 2024) based on the positive effect that the anticipated 14% increase in spending on cyber security in 2024 was expected to have on the category.

Below is how each of the 10 constituents in the Index performed last week, in ascending order, and YTD, plus news, commentary, and/or analysis where applicable.

1. Palo Alto Networks (PANW): down 23.0% last week; down 4.3% YTD
   • provides subscription services covering the areas of threat prevention, malware, and persistent threat, URL filtering, laptop and mobile device protection as well as DNS, Internet of Things, SaaS, API, and SaaS security inline, and threat intelligence, and data loss prevention.
   • Latest News, Commentary, and/or Analysis:
     • Chief Executive Officer Nikesh Arora noted on a call with analysts that clients were showing signs of “spending fatigue” even as online threats increased and now expects fiscal 2024 revenue and total billings to decline, albeit marginally.
2. SentinelOne (S): down 7.8% last week; down 0.8% YTD
   • is a global leader in AI security using its Singularity™ Platform to detect, prevent, and respond to cyber attacks enabling organizations to secure endpoints, cloud workloads, containers, identities, and mobile and network-connected devices with speed, accuracy, and simplicity.
   • Latest News, Commentary, and/or Analysis:
     • Cybersecurity Stocks Tumble
3. Zscaler (ZS): down 6.9% last week; up 6.2% YTD
   • is a cloud security company that prevents cyberthreats and data loss while providing users with fast, reliable zero trust connectivity to apps from anywhere.
   • Latest News, Commentary, and/or Analysis:
     • Investors might be losing patience for Zscaler's increasing losses, as stock sheds 6.9% over the past week
4. Tenable Holdings (TENB): down 6.8% last week; up 3.3% YTD
   • provides organizations with a broad range of cyber security solution platforms.
   • Latest News, Commentary, and/or Analysis:
     • Why Fortinet, SentinelOne, CrowdStrike, and Other Cybersecurity Stocks Plunged Wednesday Morning
5. CrowdStrike Holdings (CRWD): down 5.4% last week; up 22.0% YTD
   • is focused on cloud-native solutions and AI-driven threat detection and a leader in endpoint security.
   • Latest News, Commentary, and/or Analysis:
     • CrowdStrike Holdings (CRWD) Dips More Than Broader Market: What You Should Know
6. CyberArk Software (CYBR): down 1.7% last week; up 16.8% YTD
   • enables secure access for any identity to any resource - protecting identities and critical assets by enabling Zero Trust and enforcing least privilege.
   • Latest News, Commentary, and/or Analysis:
     • Cybersecurity Stocks To Watch Amid Shift To AI, Cloud
7. Check Point Software (CHKP): down 1.5% last week; up 4.9% YTD
   • offers a multilevel security architecture of cloud, network, mobile devices, endpoints information, and IOT solutions.
   • Latest News, Commentary, and/or Analysis:
     • Check Point Software Unveils Comprehensive 2024 Security Report, Highlighting Ransomware Surge and AI Defense Innovations
8. Fortinet (FTNT): down 1.2% last week; up 15.6% YTD
   • provides a wide range of cybersecurity and networking solutions
   • Latest News, Commentary, and/or Analysis:
     • Fortinet's 5-year total shareholder returns outpace the underlying earnings growth
9. Varonis Systems (VRNS); down 1.0% last week; up 8.2% YTD
   • provides security products that manage network events in real-time to detect any breaches or threats and expanded its support for Microsoft's Office 365 platform in November 2023 by adding new features to protect against malicious emails.
   • Latest News, Commentary, and/or Analysis: Varonis Systems (VRNS) Price Target Increased by 21.73% to 53.95
10. Qualys (QLYS): down 0.7% last week; down 16.7% YTD
    • offers a complete set of cybersecurity products for small businesses that use Amazon.com's  Amazon Web Services (AWS) platform.
    • Latest News, Commentary, and/or Analysis:
      • Is Qualys (QLYS) a Uniquely Positioned Company?

Conclusion

The munKNEE Cybersecurity Software Stocks Index was down 7.8% last week and is now only up 5.5% YTD.

Cybersecurity ETF

Investing in a basket of cyber security stocks is a quick and easy way to get investment portfolio exposure to this critical segment of the tech sector. The Global X Cybersecurity ETF (BUG), for example, consists of 31 stocks, has an expense ratio of 0.51% and was down 4.2% last week and is now only up 1.1% YTD.

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