Société Générale Highlights Cybersecurity Stocks Amid AI Doomsday Fears

• •Société Générale predicts ongoing growth in cybersecurity stocks.
• •The Global X Cybersecurity ETF rose 10% last week amid AI doomsday fears.
• •EPS growth in cybersecurity has averaged 16% annually since 2020.

Société Générale forecasts continued growth in cybersecurity stocks following a market rebound spurred by AI doomsday fears. The Global X Cybersecurity ETF rose 10% last week, with notable increases in stocks like Palo Alto Networks and CrowdStrike, which rose 10% and 15%, respectively. Manish Kabra, the chief US equity strategist at Société Générale, noted that earnings-per-share (EPS) growth has compounded at approximately 16% annually since 2020. He emphasized that despite recent gains, valuations remain in line with historical averages. The bank's cybersecurity stock basket has a forward PE ratio of around 25, below its historical average of 30.2. This basket provides diversification from traditional AI trades, showing low correlation with semiconductor stocks. The report indicates strong year-to-date returns for several stocks in the basket, with some exceeding 100%. The overall sentiment suggests a positive outlook for cybersecurity investments as AI safety spending increases.