HACK declined 4.7% amid broader cybersecurity sector weakness. According to the sources, cybersecurity stocks have underperformed the S&P 500 by more than 36% over the past year as investors rotated capital into perceived artificial intelligence winners. This rotation affected the sector despite unchanged fundamental conditions, with valuations now at five-year lows. Additionally, cybersecurity stocks retreated following Anthropic's release of "Claude Code Security," which impacted software development tool providers. The sources note that enterprise security budgets remain projected at $212 billion in 2025, and major cybersecurity companies have maintained strong operating margins and balance sheets. The underperformance reflects capital rotation patterns rather than deterioration in underlying demand or operational performance.
Read full analysisHACK declined 4.7% amid broader cybersecurity sector weakness. According to the sources, cybersecurity stocks have underperformed the S&P 500 by more than 36% over the past year as investors rotated capital into perceived artificial intelligence winners. This rotation affected the sector despite unchanged fundamental conditions, with valuations now at five-year lows. Additionally, cybersecurity stocks retreated following Anthropic's release of "Claude Code Security," which impacted software development tool providers. The sources note that enterprise security budgets remain projected at $212 billion in 2025, and major cybersecurity companies have maintained strong operating margins and balance sheets. The underperformance reflects capital rotation patterns rather than deterioration in underlying demand or operational performance.
HACK is an ETF tracking a basket of cybersecurity companies including Palo Alto Networks, CrowdStrike, and Fortinet, providing broad exposure to firms specializing in network security, endpoint protection, and threat detection. The fund has underperformed the S&P 500 by over 36% in the past year as capital rotated aggressively into AI beneficiaries, pushing cybersecurity valuations to five-year lows. Anthropic's launch of 'Claude Code Security' on February 20 intensified fears that AI could automate functions these vendors currently sell, triggering a multi-day selloff now in its third session.