Upgrading One of Our ETF Holdings and Boosting Its Price Target

Following our comments in today’s 8 Key Items Shaping the Stock Market alert, we are upgrading the Portfolio’s rating on First Trust Nasdaq Cybersecurity ETF (CIBR) to One, from Two, and boosting our price target to $115 from $105. As we make those moves, we will also lift our checkpoint for CIBR shares to $85 from $75.

What we are not doing is buying additional CIBR shares, and the reason for that is CIBR already accounts for just over 4.0% of Portfolio assets. However, for newer folks or those whose position size is well below the Portfolio’s, we see this recent pullback from the $110 area as a very nice place to add.

Part of why we see that as a nice place to add shares is fueled by the 10% drop in the ETF, which, as we see in the chart above, has tended to bring an opportunity to investors. The other, however, are the items we shared in this morning’s alert that overwhelmingly reinforce our view that AI adoption by bad actors will expand the vector and velocity for cyberattacks.

If you missed that alert, you can find it here, and as it relates to CIBR shares, be sure to zero in on item 6. That said, don’t miss the nugget in item 3 from OpenRouter that brings the latest supporting data point for AI adoption and expanding usage that keeps us bullish on AI infrastructure and supported our decision to add to three AI-related positions earlier today.

With the pace of third-quarter earnings season poised to pick up, we’ll look to connect the comments on conference calls on AI adoption and usage and cybersecurity spending back to the Portfolio’s respective holdings. What we learn may give us reason to revisit a few price targets along the way.

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At the time of publication, TheStreet Pro Portfolio was long CIBR shares.