MSFT - BUG ETF: Let's Face It Microsoft And Google Are Also Cybersecurity Plays
2024-02-23 16:10:14 ET
Summary
- The competition dynamics in the cybersecurity industry are changing as large cloud service providers like Microsoft and Google now propose AI-based threat protection integrated within their products.
- At the same time Palo Alto, one of the GlobalX ETF's top holdings has seen its stock tumble after providing weak guidance.
- Thus, this is not a buy-the-dip opportunity due to emerging sources of competitive threats for pure-play service providers or those whose principal business consists of providing cybersecurity services.
- It is better to wait and see how BUG's holdings adapt and take advantage of Generative AI which offers new opportunities both to enhance product offerings as well as to augment productivity.
- Alternatively investors can opt for individual names.
The last time I covered the Global X Cybersecurity ETF (NASDAQ: BUG ) was through a bullish thesis in August 2021 given the additional sales prospects for its holdings after the high-profile SolarWinds SUNBURST cybersecurity attacks of December 2020. However, per the chart below, the share price is down by around 5.3% since then and is now trading at around $28.6....
BUG ETF: Let's Face It, Microsoft And Google Are Also Cybersecurity Plays