−7.5%
since Oct 6
The idea
I think security budgets are consolidating, moving away from dozens of point tools toward a handful of big AI-powered platforms, while AI-driven attacks push spending higher overall. This basket leans into the consolidators like Palo Alto, CrowdStrike, Microsoft, and Fortinet, backed by cloud, identity, and attack-surface names plus two sector ETFs for ballast so one bad quarter doesn't define it. I'm holding cash on the side to add to the core if the market overreacts to a single earnings miss, with a one to two year horizon.
What it owns
- These companies are winning by bundling multiple security tools into platforms that replace customers' separate point products, capturing a larger share of each customer's spending. · CrowdStrike HoldingsIt started in endpoint protection and keeps expanding its platform by adding modules that customers adopt instead of buying separate tools., Palo Alto NetworksIt actively consolidates point products into a unified platform and bundles them into deals, betting that customers stop buying best-of-breed tools., MicrosoftIt sells security as part of licenses already in place, making it the default consolidation choice for many buyers while controlling the AI infrastructure both attackers and defenders use., FortinetIt is converting its large installed base of firewalls into a broader platform where networking and security converge.32%
- These companies replace legacy on-premises infrastructure with cloud-based services, capturing the budget shift away from traditional network and security hardware. · ZscalerIt replaces traditional corporate network perimeters with a cloud service, the type of infrastructure swap that frees budgets for consolidation., CloudflareIt sits in front of significant internet traffic and layers security and AI services on top, simplifying security through a single network platform., Check Point SoftwareIt is a profitable incumbent pushing its own consolidated platform at a lower price point, offering the same consolidation trend at a value price., Akamai TechnologiesIt is shifting its growth from content delivery toward security and cloud compute, so the take needs security revenue to keep growing as a larger portion of its total.20%
- These companies are building security layers on top of data visibility and monitoring, positioning themselves to benefit as AI raises the stakes for data protection. · RubrikIt protects and recovers data after ransomware attacks and is building AI-driven security on top of that visibility, betting that rising AI threats increase recovery spending., DatadogIt observes everything running in cloud environments and is extending that visibility into security, converting monitoring customers into security customers.10%
- These companies help organizations map and secure everything exposed to the internet, a job that grows more urgent as AI accelerates attack speed. · Tenable HoldingsIt maps everything a company exposes to the internet, a job that grows more complex as AI lets attackers probe faster and broader., Varonis SystemsIt secures data itself by controlling access and monitoring usage, which matters more as companies feed sensitive information into AI tools., QualysIt identifies where companies are exposed before attackers find vulnerabilities, a job that becomes more urgent as AI-driven attacks accelerate.10%
- These broad cybersecurity funds provide exposure to the sector's overall growth trend, protecting the take if the consolidation story shifts to unexpected winners. · First Trust NASDAQ Cybersecurity ETFIt holds a broad mix of cybersecurity stocks, so the take still wins if security spending rises even if a different vendor wins the consolidation race., Amplify Cybersecurity ETFIt holds a broad mix of cybersecurity stocks across a different fund provider than the first ballast position, protecting the take if the consolidation story shifts.9%
- Identity is where most modern attacks begin, making it a critical layer for companies consolidating their security stacks. · OktaIt is the largest independent identity platform, and identity is where most modern attacks start, making it essential for companies consolidating their security.5%
- Cash14%