2 ASX cybersecurity shares going gangbusters this week

Here’s why these ASX cybersecurity stocks have been surging lately.

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Key points

  • 2 ASX cybersecurity stocks have been gaining this week
  • Their strong performance comes amid concerns of increased Russian cyberattacks amid the nation's invasion of Ukraine 
  • Additionally, the ASX tech sector has rebounded after last week's disastrous plunge

A message from our CIO, Scott Phillips:

“G’day Fools. If you’re like us, you’re dismayed by the events taking place in Ukraine. It is an unnecessary humanitarian tragedy. Times like these remind us that money is important, but other things are far more valuable. And yet the financial markets remain open, shares are trading, and our readers and members are looking to us for guidance. So we’ll do our best to continue to serve you, while also hoping for a swift and peaceful end to war in Ukraine.”

It’s proving to be a big week for ASX cybersecurity shares as fears of Russian cyber attacks grow and the tech sector recovers.

Internationally, cybersecurity stocks Crowdstrike Holdings Inc (NASDAQ: CRWD) and Palo Alto Networks Inc (NASDAQ: PANW) have each gained around 15% over their last five sessions.

And the theme is carrying over to the ASX. Let’s take a look at what’s seemingly got investors bullish on cybersecurity and two ASX shares that could be benefiting.

What’s driving ASX cybersecurity shares higher?

Warning bells are ringing after Western powers – including Australia – placed sanctions on Russia, barring its banks from accessing the Society for Worldwide Interbank Financial Telecommunications (SWIFT) payment system.

International banks are likely now preparing for retaliatory cyberattacks, according to reporting by Reuters.

Meanwhile, Telstra Corporation Ltd (ASX: TLS) CEO Andy Penn told the Mobile World Congress that the crisis occurring in Ukraine is an example of a changing landscape where cyberattacks can ultimately harm individuals and businesses anywhere, as reported by The Australian.

Just last week, the Australian Cyber Security Centre (ASCS) issued a warning to organisations, asking them to consider strengthening their cybersecurity measures following Russia’s invasion of Ukraine.

Of course, concerns of malicious cyber activity have helped put a spotlight on ASX cybersecurity shares.

Additionally, as cybersecurity stocks inevitably overlap with the technology sector, it’s worth mentioning the latter’s recent rebound.

After plunging last Thursday, the S&P/ASX All Technology Index (ASX: XTX) and S&P/ASX 200 Information Technology Index (ASX: XIJ) have recovered their losses – and then some.

The All Tech Index is currently 5% higher than it was one week ago. Meanwhile, the ASX 200 Info Tech Index is 10% higher.

These ASX cybersecurity shares have taken off this week

ArchTIS Ltd (ASX: AR9)

Producer of cybersecurity and secure information sharing solutions, ArchTIS has seen its share price surge 14% over the last week. At the time of writing, shares in the company are trading for 19 cents apiece.

Worth noting, the company released its earnings for the first half of financial year 2022 last Thursday.

Over the half, the company’s revenue more than doubled ­to reach $2.4 million last half. That’s a 118% increase on that of the prior comparable period.

Additionally, its reoccurring revenue grew 104% to $2 million.

WhiteHawk Ltd (ASX: WHK)

The WhiteHawk share price began trading after an extended freeze late on Thursday. It has since gained 34% to trade at 16 cents.

The trading halt was imposed by the ASX as it ran a fine-toothed comb through the company’s recent disclosures.

The following day, WhiteHawk dropped its preliminary report for 2021.

Last year, the company’s revenue increased 180% on that of 2020 while it posted an after-tax loss of US$2.5 million.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended CrowdStrike Holdings, Inc. The Motley Fool Australia owns and has recommended Telstra Corporation Limited. The Motley Fool Australia has recommended CrowdStrike Holdings, Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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