−8.3%
since Oct 8
The idea
I believe security budgets are consolidating: companies are ditching dozens of point tools for a handful of AI-powered platforms, while AI-driven attacks only raise the pressure to spend. This basket owns the platform leaders taking share, plus cloud, identity, AI-native defense, and attack-surface names riding the same shift, with two sector ETFs for ballast so no single company can sink it. I'm holding one to two years and keeping 10% in cash to add to the core if the market overreacts to a weak quarter.
What it owns
- These companies are converting their installed bases into broader platforms, replacing point products with integrated suites that customers adopt module by module. · CrowdStrike HoldingsIt started at the endpoint and keeps adding modules customers adopt instead of replacing them with separate tools, making it the clearest example of consolidation flowing to a single vendor., Palo Alto NetworksIt actively bundles tools to replace customers' point products and is the loudest advocate for platformization across the industry., MicrosoftIt sells security as part of licenses companies already pay for, making it the default consolidation choice for many buyers, and it owns the AI infrastructure both attackers and defenders run on., FortinetIt is converting its massive firewall installed base into a broader platform, especially where networking and security converge.32%
- These companies replace legacy network perimeters and infrastructure with cloud-native services, capturing budgets that shift away from on-premises hardware. · ZscalerIt replaces the old corporate network perimeter with a cloud service, exactly the kind of legacy-tool replacement that consolidation budgets fund., CloudflareIt sits in front of a huge share of internet traffic and is layering security and AI services on top of that network position., Check Point SoftwareIt is a cheaper, profitable incumbent pushing its own consolidated platform, giving the take a value-priced way to own the same shift., Akamai TechnologiesIts growth now comes from security and cloud compute rather than its legacy content delivery business, making it a pure-play on the security shift.20%
- These companies built security around AI from inception or are extending AI capabilities into their core products, positioning them to handle faster attack cycles. · RubrikIt protects and recovers data after ransomware strikes, and it is building AI-driven security on top of that data foundation., SentinelOneIt built its defense around AI from inception and competes directly with endpoint consolidation leaders at lower price points., DatadogIt watches everything running in a company's cloud and is extending that visibility into security, fitting the fewer-vendors story.14%
- These companies map and secure what companies expose to the internet, a job that grows more urgent as AI-powered reconnaissance accelerates. · Tenable HoldingsIt maps everything a company exposes to the internet, a job that grows more urgent as AI lets attackers probe faster and broader., Varonis SystemsIt secures data itself by flagging who can touch what, a capability that matters more as companies feed sensitive data into AI tools., QualysIt tells companies where they are exposed before attackers find vulnerabilities, a capability that grows more critical as AI-generated attacks accelerate.10%
- These funds hold broad cybersecurity exposure, protecting the take if sector spending rises but the specific consolidation picks underperform. · First Trust NASDAQ Cybersecurity ETFIt provides broad cybersecurity sector exposure, letting the take benefit if security spending rises even if individual vendor bets miss., Amplify Cybersecurity ETFIt is the second sector ETF, spreading ballast across two fund providers with slightly different holdings to track broader security spending.9%
- Identity is the entry point for most modern attacks, so consolidating buyers need independent depth here alongside their platform choices. · OktaIdentity is where most modern attacks start, and it is the largest independent vendor consolidating buyers can rely on for this critical layer.5%
- Cash10%