Alphabet Bets Big On Cybersecurity: 3 ETFs Poised For A Jackpot

Google’s parent company, Alphabet GOOGL, is paying $32 billion to buy cloud cybersecurity startup Wiz — a record deal for the company.

This is not a Google Cloud power play; it’s a deal that can upend the entire cybersecurity sector and provide a new spark to ETFs invested in cloud computing, cybersecurity, and mega-cap tech.

For those who want to surf the wave, three ETFs stand to gain: Amplify Cybersecurity ETF HACK, First Trust NASDAQ Cybersecurity ETF CIBR, and Global X Cybersecurity ETF BUG.

Amplify Cybersecurity ETF: HACK follows the Nasdaq ISE Cyber Security Select Index and holds 25 stocks. Alphabet is not a core position, but M&A rumors in the cybersecurity space could drive gains throughout the ETF. HACK has $2.01 billion in assets under management and levies 0.60% in annual fees. Interestingly, this was the first ever ETF dedicated solely to the cybersecurity sector.

First Trust NASDAQ Cybersecurity ETF: CIBR tracks the Nasdaq CTA Cybersecurity Index, with 32 holdings across the cybersecurity arena. With AUM of $8.03 billion, this ETF might experience increasing valuations and increasing deal speculation. It has a fee of 0.59% annually.

Global X Cybersecurity ETF: BUG invests in firms that will gain from the increasing demand for cybersecurity solutions. It follows the Indxx Cybersecurity Index, holding 28 stocks with a focus on network security, cloud protection, and cyber defense services. With $891.7 million in assets under management, BUG levies 0.50% in annual fees. With the rising significance of cloud security, this ETF may experience robust momentum as Alphabet’s Wiz acquisition puts more focus on the industry.

Also Read: 3 Cybersecurity ETFs in Focus Amid Reports of US Cyber Operations Suspension

Why Is Alphabet All-In On Wiz?

Wiz is no ordinary cybersecurity company. it’s among the fastest-growing cloud security brand names. Having been established in 2020, it enables companies to detect vulnerabilities in cloud environments, something that has become increasingly important with the growing need to combat rising cyber threats. With cyber attacks increasingly common and complex, companies are more concerned than ever before with cloud security.

For Alphabet, the transaction boosts Google Cloud’s standing against its heavyweight competitors—Amazon’s AMZN AWS and Microsoft MSFT Azure—both of which have been heavily investing in security products.

The agreement also arrives at a time when cybersecurity M&A is on the rise. With the regulatory environment likely to be more accommodating with the current administration, this may be just the start of more large deals in the area.

Alphabet’s Wiz acquisition could be the tip of the iceberg for a new wave of cybersecurity M&A. With threats in cyberspace growing by the day, cloud security remains a top priority for most companies.

As cybersecurity emerges as a preeminent trend in tech investing, investors would be wise to watch HACK, CIBR, and BUG ETFs.

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