The bull market still runs on chips, but cybersecurity stocks have stolen the spotlight in May, breaking out to record highs while semiconductors recover from their latest pullback.
The First Trust Nasdaq Cybersecurity ETF (CIBR) is up about 25% this month, beating both the iShares Semiconductor ETF (SOXX) and the iShares Expanded Tech-Software Sector ETF (IGV). CIBR has also hit seven straight intraday records after recently clearing its October high.
That flips the usual tech script.
Semiconductors have been the backbone of this bull market, and the chip trade is still doing plenty of heavy lifting. SOXX is up nearly 80% this year and more than 60% this quarter, even after falling just over 10% from its May 11 peak to its May 19 low.
Buyers rushed back in fast. But the strongest tech line on the chart this month belongs to cybersecurity.
Comparing the move to the broad software industry makes it stand out even more. IGV is up about 12% in May and has held up since the S&P 500 (^GSPC) peaked on May 14, but it remains down double digits this year and is still about 20% below its closing high.
Cybersecurity looks less like a bounce and more like leadership — even after Cloudflare’s 24% wipeout earlier this month tested the trade.
CIBR is not a pure cybersecurity basket. Large holdings such as Cisco (CSCO), Alphabet (GOOGL), and Broadcom (AVGO) pull in networking, cloud, chips, and AI infrastructure. But that also captures what cybersecurity has become as a trade: part software, part cloud, part AI build-out, and part old-fashioned enterprise spending.
Under the hood, the move has muscle. CrowdStrike (CRWD) has hit eight straight intraday records, while Palo Alto Networks (PANW), Fortinet (FTNT), F5 (FFIV), and Datadog (DDOG) are also hitting records today. Cisco (CSCO) adds a legacy-networking heavyweight to the breakout list.
The rally has also added real size, with Crowdstrike, Palo Alto Networks, Datadog, Fortinet, and Cisco each adding tens of billions in market value in May.
Not every chart is joining in, though. Zscaler (ZS) and Okta (OKTA) are bouncing but remain far below old highs, while Dynatrace (DT) has lagged the broader cyber rebound. Check Point (CHKP) is still fighting its old dot-com-era ceiling.
For now, the level to watch is CIBR’s old breakout zone around $78. Hold above those October highs, and cybersecurity keeps looking like software’s leadership pocket. Fall back below that level, and the record run starts looking more like another failed tech breakout.
Jared Blikre is the global markets and data editor for Yahoo Finance. Follow him on X at @SPYJared or email him at jaredblikre@yahooinc.com.
