Cyber stocks surge as NATO commits to historic | Australian Markets

Cybersecurity-focused ETFs have delivered distinctive outperformance over the previous six months, as NATO members commit to substantial will increase of their defence spending, together with a important allocation to cyber defence.

Global X stories that its Cybersecurity ETF (BUGG) has delivered 8.2% returns to traders over the previous six months, notably outperforming the MSCI World Index (+3.8%) and Nasdaq Composite (+2.5%) in whole AUD returns.

The fund has benefited significantly from its “targeted exposure to high-conviction names” within the cybersecurity sector, Global X mentioned, together with CrowdStrike, Zscaler, and Okta – corporations which have posted double-digit positive factors in 2025.

The trans-Atlantic army defence bloc has moved to formalise a historic increase in defence spending, with a proposed goal of 5% of GDP. This spending dedication, importantly, consists of a 1.5% allocation to ‘non-traditional’ defence, together with cybersecurity, space, and infrastructure safety.

This increase may unlock more than US$3 trillion in NATO-aligned defence investment by 2030. Last yr, the 32-member bloc spent simply over $1.3 trillion on defence priorities.

For Global X, this shift has “redefined how cybersecurity is classified and financed, unlocking new investment flows into the sector”.

“This is more than a budget change, it’s a strategic reclassification of cybersecurity as critical infrastructure,” mentioned Billy Leung, senior investment strategist at Global X, placing it on par with communications, power and space in national defence budgets.

“We’re witnessing a shift from fragmented, discretionary spending to predictable, multi-year procurement cycles aligned with national security goals.”

For Leung, the non-discretionary nature of cybersecurity is now “driving consistent investment, shielding the sector from volatility affecting other technology verticals”.

Global X notes a number of different long-term structural trends reinforcing the demand for cybersecurity:

• Procurement formalisation – governments adopting long-cycle contracts and coordinated cyber plans.
• Platform consolidation – enterprises lowering device sprawl and standardising on full-stack security platforms.
• Regulatory strain – SEC, EU NIS2, and APAC mandates growing compliance burdens and investment necessities.

“With cyber threats increasing, regulatory pressure mounting, and state-level funding rising, the case for long-term, strategic investment in cybersecurity continues to strengthen,” Global X concludes.