Overnight, U.S. cybersecurity stocks experienced a massive rally, with CrowdStrike surging over 20% and Okta jumping 28%. Looking at a longer timeframe, both American cybersecurity stocks have gained more than 80% so far this year. Earnings reports previously released by Okta and CrowdStrike revealed that as AI applications accelerate, AI Agents are driving an increase in cyberattacks, prompting customers to boost spending on cybersecurity tools.
On the news front, during OpenAI's cybersecurity capability test in July, approximately 1,200 AI-model-driven agents, which were supposed to remain isolated from each other, established communication through unauthorized channels, exchanging over 70,000 messages and files. Around 700 of these agents subsequently participated in an intrusion attempt against the Hugging Face system. OpenAI stated it has taken measures to deploy more isolated "sandbox" environments for relevant programs, restrict high-risk models' internet access, and strengthen monitoring of model reasoning.
Industry insiders point out that AI security testing is becoming a essential requirement, and domestic cybersecurity vendors have already positioned themselves. The stronger the large model capabilities, the greater the need for dedicated teams to test whether they can "jailbreak" or cause trouble within sandboxes. Red team assessments, which involve simulating attackers to proactively find vulnerabilities in large models and test their defenses, are transforming from a bonus feature into a mandatory component of the large model industry chain. Domestic cybersecurity companies have already turned this business into marketable products, allowing them to capture growth from this sector without needing direct business ties to OpenAI or Hugging Face.
In today's trading session (August 28), A-share cybersecurity stocks triggered a wave of limit-ups. Hunan Kylinsec Technology Co.,Ltd. and Dingjie Digital both hit the 20% daily limit, while Tianrongxin, Shuifei Co., Ltd., Jiuqi Software, and 360 Security Technology all rose by the 10% limit. Sangfor Technologies gained over 12%, and stocks like Fushou Software, Nsfocus, and DBAPPSecurity also posted substantial gains. The underlying index of the Software Development ETF (159036), which comprises 107 software development stocks, climbed over 3% intraday, aiming for a fourth consecutive day of gains.
Regarding valuations, as of August 27, the price-to-earnings ratio (PE, TTM) of the software development index stood at 164.78 times, which is below more than 78% of historical trading periods since its listing, indicating notable valuation attractiveness and safety margin.
Where the hardware journey ends, software's season begins
Throughout history, profits from technological revolutions have tended to flow from hardware to applications. The endpoint of hardware development often signals the start of software's heyday. At the beginning of this year, driven by the narrative of "large models devouring software," AI application sectors saw significant valuation discounts compared to computing power and model layers. The software development sector has become a relatively undervalued niche within the AI industry chain, offering cost-effectiveness and higher safety margins. Combined with AI empowerment and the push for domestic IT innovation, the software development sector is poised to rise.
The software industry as a whole is on an upward cycle. However, uncertainty remains over which specific sub-sector or stock will outperform. Rather than betting on a single niche, the Software Development ETF (159036), via its underlying index covering the entire industry with 107 constituent stocks, offers a more comprehensive and balanced approach, potentially capturing the sector's beta returns. Data shows that the fund's constituents span AI+finance, AI+healthcare, AI+office, AI+education, AI+information security, and AI+government affairs, with AI application concept stocks accounting for 46.56% of the weight as of July 15. The underlying index also covers other popular themes, with weights for cloud computing, IT innovation industry, fintech, cybersecurity, and HarmonyOS ecosystem at 41.02%, 39.26%, 33.08%, 15.05%, and 14.47%, respectively, as of the same date.
Regarding fees, the Software Development ETF (159036) does not charge sales service fees. When subscribing or redeeming fund shares, the agency broker may collect a commission of up to 0.3%. On-exchange trading fees are subject to actual charges by the securities firm.
Risk disclosure: The Software Development ETF passively tracks the CSI All Share Software Development Index, with a base date of December 31, 2021, and a publication date of March 29, 2023. The fund is issued and managed by Hua宝 Fund, and the distributor does not bear investment or redemption responsibilities. Investors should carefully read the Fund Contract, Prospectus, Fund Product Summary, and other legal documents to understand the fund's risk-return characteristics and choose products that match their risk tolerance. The fund's risk level assessed by the fund manager is R3, suitable for investors rated C3 (balanced) and above; the suitability matching opinion is subject to the sales institution. Sales institutions (including the fund manager's direct sales and other distributors) evaluate the fund's risk according to relevant laws and regulations. Investors should promptly review the suitability opinion issued by the sales institution and defer to its matching results. Opinions on appropriateness from different sales institutions may not be consistent, and the risk level rating provided by fund sales institutions shall not be lower than that assessed by the fund manager. Risk-return characteristics and risk levels in the Fund Contract may differ due to varying considerations. Investors should understand the fund's risk-return profile and carefully select fund products based on their own investment objectives, horizon, experience, and risk tolerance, bearing risks themselves. Registration by the China Securities Regulatory Commission does not imply a substantive judgment or guarantee on the fund's investment value, market prospects, or returns. Past performance and net asset value do not predict future performance, and performance of other funds managed by the fund manager does not constitute a guarantee of this fund's performance. Funds carry risks; invest with caution!