Are Cybersecurity Shares Too Hot?

June 28, 2015

A series of high-profile data breaches has propelled shares of mostly smaller U.S. companies that protect against computer hacks to dizzying heights, raising valuation concerns in a hot corner of the technology world.

Palo Alto Networks Inc. has jumped 43% this year, CyberArk Software Ltd. has soared 66%, and Infoblox Inc. has gained 35%. The PureFunds ISE Cyber Security Exchange-Traded Fund, which started trading in November, has jumped 22% this year and crossed $1 billion in assets in June. The S&P 500 has gained 2.1% and the tech-heavy Nasdaq Composite Index has advanced 7.3% in the same period.

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