−7.2%
since Oct 6
The idea
Security budgets are consolidating, companies are cutting dozens of point tools down to a few big AI-powered platforms, and AI-driven attacks are pushing that spending higher. I built this to own the winners of that shakeout rather than the sector broadly: a core of consolidation leaders, surrounded by cloud and network security, identity, AI-native defense, and attack-surface specialists, with two sector ETFs for ballast. I'm holding cash on the side to add to the core if the market overreacts to a single bad quarter, with a one to two year horizon on the idea.
What it owns
- These companies are actively bundling security tools into platforms that replace point products, making them the consolidation beneficiaries if customers continue to simplify their vendor stacks. · Palo Alto NetworksIt advocates loudly for platformization and actively bundles tools to replace customers' point products, making it the clearest play on consolidation-driven growth., CrowdStrike HoldingsIt started at the endpoint and keeps adding modules customers adopt instead of buying standalone tools, with module attachment rates showing whether consolidation is flowing to it., 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 offense and defense run on., FortinetIt is converting its large firewall base into a broader platform, especially where networking and security merge, requiring evidence that customers upgrade into the wider bundle.32%
- These companies replace legacy network infrastructure with cloud services, positioning them to capture budget shifts as enterprises modernize their security architecture. · ZscalerIt replaces the old corporate network perimeter with a cloud service, the type of legacy-tool replacement that benefits when security budgets shift toward modern architecture., CloudflareIt sits in front of a huge share of internet traffic and is layering security and AI services on top of that position, with growth compounding as companies simplify onto its network., Check Point SoftwareIt is the cheaper, profitable incumbent pushing its own consolidated platform, giving the take a value-priced way to own the same shift if it shows modest growth from its platform push., Akamai TechnologiesIts growth now comes from security and cloud compute rather than content delivery, so the take needs security to keep becoming a bigger share of its revenue for this position to hold.20%
- These companies built security around AI from the ground up or are extending existing visibility into AI-driven security, positioning them to capture spending as attack complexity rises. · RubrikIt protects and recovers data after ransomware hits and is building AI-driven security on top of that data, relying on faster subscription growth as AI-raised stakes push recovery spending up., SentinelOneIt built its defense around AI from day one and competes at lower prices, but needs to keep growing fast and move toward profit for consolidation to happen with it in the mix., DatadogIt watches everything running in a company's cloud and is extending that visibility into security, fitting the fewer-vendors story if it keeps converting monitoring customers into security customers.14%
- These companies help identify where companies are exposed before attackers strike, a job that becomes more critical as AI-generated attacks can probe faster and broader. · Tenable HoldingsIt maps everything a company exposes to the internet, a job that grows larger as AI lets attackers probe faster, and it needs to show its broader exposure-management platform winning deals beyond basic scanning., Varonis SystemsIt secures the data itself by flagging who can touch what, which matters more as companies feed sensitive data into AI tools, and its shift to cloud subscription needs to keep converting customers., QualysIt tells companies where they are exposed before attackers find it, a map that becomes more urgent as AI-generated attacks make discovery easier, and it is already profitable and steady.10%
- These ETFs hold broad cybersecurity exposure, so the take benefits from rising security spending even if a different vendor wins the consolidation fight. · First Trust NASDAQ Cybersecurity ETFIt holds the broad cybersecurity sector, so the take benefits if security spending rises even if a different vendor than expected wins the consolidation fight., Amplify Cybersecurity ETFIt is the second cybersecurity ETF, spreading ballast across two fund providers with slightly different holdings, and keeps the take alive on broad spending trends if individual picks miss.9%
- Identity is where most modern attacks start, so consolidated platforms need a serious independent identity layer to win broader deals. · OktaIt is the largest independent identity platform, and consolidated buyers need a serious identity layer, making it crucial that it keeps winning identity budgets against Microsoft's bundle.5%
- Cash10%