−8.4%
since Oct 8
The idea
I believe security budgets are consolidating: companies are ditching dozens of point tools for a few AI-capable platforms, while AI itself makes attacks worse and forces spending up toward whoever can keep pace. So this owns the platform leaders at the core, surrounded by cloud, identity, AI-native, and attack-surface specialists riding the same shift, plus two sector ETFs for ballast so no single name can sink it. I'm holding cash on the side to add if the market overreacts to a bad quarter, with a one to two year horizon.
What it owns
- These companies are winning as buyers replace point products with unified platforms, driving faster growth in total contract value and module adoption across their customer bases. · Palo Alto NetworksIt advocates loudest for platform consolidation and bundles tools to replace customers' point products, making its platform deal growth and contract value expansion central to this take., CrowdStrike HoldingsIt started at the endpoint and keeps adding modules customers adopt instead of standalone tools, so rising modules per deal signals consolidation is flowing its way., 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 attacker and defender use., FortinetIt is converting its huge firewall base into a broader platform, especially where networking and security merge, and must show customers upgrading into the wider bundle.32%
- These companies replace legacy network infrastructure with cloud services, capturing the budget shift as companies retire old perimeter-based tools. · ZscalerIt replaces the old corporate network perimeter with a cloud service, exactly the legacy-tool replacement this take expects budgets to fund., CloudflareIt sits in front of a huge share of internet traffic and layers security and AI services on top, with the bet that security revenue compounds 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 its platform push shows modest growth., Akamai TechnologiesIts growth now comes from security and cloud compute rather than content delivery, so it needs security to keep becoming a bigger share of revenue for this position to hold.20%
- These companies were built with AI at their core or are converting existing customer relationships into AI-powered security, positioning them for faster growth as stakes rise. · RubrikIt protects and recovers data after ransomware hits and is building AI-driven security on top of that data, needing fast subscription growth as AI-raised stakes push recovery spending up., 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., SentinelOneIt built its defense around AI from day one and competes with CrowdStrike at lower prices, needing to keep growing fast and moving toward profit for this higher-risk bet to work.14%
- These companies help companies find exposure before attackers do, a job that becomes more urgent as AI-powered attacks scale faster. · QualysIt tells companies where they are exposed before attackers find it, a job that becomes more urgent as AI-generated attacks scale, and it is profitable and steady., Tenable HoldingsIt maps everything a company exposes to the internet, a job that gets bigger as AI lets attackers probe faster, and its broader platform must keep 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 must keep converting customers.10%
- These ETFs track the broader cybersecurity sector, protecting the take if spending rises but different vendors than expected win consolidation deals. · First Trust NASDAQ Cybersecurity ETFIt holds the broad cybersecurity sector, so the take still benefits if security spending rises even if a different vendor than expected wins consolidation., Amplify Cybersecurity ETFIt is the second sector ETF spreading ballast across two fund providers with slightly different holdings, keeping the take alive on the broad spending trend if individual picks miss.9%
- Identity is the primary attack vector in modern threats, so consolidating buyers need a dedicated identity layer to complete their platform. · OktaIdentity is where most modern attacks start, and it is the biggest independent identity provider, so it must keep winning identity budgets rather than losing them to Microsoft's bundle.5%
- Cash10%