iseDavid Kostin, strategist at Goldman Sachs, recently reported that the ISE Cyber Security Index is up 22 percent so far this year, significantly higher than the 3 percent gain the S&P 500 has seen in the same time frame.

Although Goldman argues that it expects growth stocks to lag the market as the economy improves, Kostin believes that the cybersecurity market will perform differently much like the biotech industry has done, “… growth stocks historically underperform when GDP growth expectations accelerate. However, the prospect of significant and sustained sales growth for cybersecurity firms brings to mind the Biotechnology industry, another part of the market that has generated huge sales growth and soaring returns. Biotech returns have outpaced S&P 500 by 255 percentage points since 2011 (339% vs. 84%).”

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