−8.2%
since Oct 6
The idea
I believe security budgets are consolidating, as companies ditch dozens of point tools for a few big AI-powered platforms, while AI-driven attacks push spending higher toward vendors that can keep pace. The basket leans into platform leaders, cloud and network security, identity, AI-native defenders, and attack-surface specialists, with two sector ETFs for ballast so no single name can sink it. I'm holding cash on the side to add to the core if the market overreacts to a weak quarter, with a one to two year horizon.
What it owns
- These companies are winning market share by bundling point products into broader platforms that replace customers' existing tools. · Palo Alto NetworksIt actively bundles point products into a consolidated platform, so total contract value growth and customer adoption of multiple modules signal whether consolidation is flowing to it., CrowdStrike HoldingsIt started at the endpoint and keeps adding modules that replace standalone tools, so rising modules per customer deal shows whether consolidation is gaining traction with its base., MicrosoftIt sells security bundled into licenses companies already pay for, making it the default consolidation choice for many buyers, and it owns the AI infrastructure both attackers and defenders rely on., FortinetIt is converting its large firewall customer base into a broader platform, especially where networking and security merge, so bundle upgrades show whether customers are consolidating with it.32%
- These companies replace legacy network perimeters and security tools with cloud-native services that consolidation budgets are shifting toward. · ZscalerIt replaces the old corporate network perimeter with a cloud service, exactly the kind of legacy-tool replacement consolidation budgets are funding., CloudflareIt sits in front of vast internet traffic and is layering security and AI services on top of that network position, so security revenue growth shows whether companies simplify onto its platform., 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, and it needs modest growth from that platform push., Akamai TechnologiesIts growth now comes from security and cloud compute rather than its old content delivery business, so security needs to keep growing as a share of revenue for this pivot to hold.20%
- These companies built security around AI from the ground up and are extending that advantage into adjacent markets as attacks grow more sophisticated. · RubrikIt protects and recovers data after ransomware and is building AI-driven security on top of that position, so fast subscription growth justifies the bet that AI raises the stakes on recovery spending., DatadogIt watches everything running in a company's cloud and is extending that visibility into security, so converting monitoring customers into security customers keeps the consolidation story intact., SentinelOneIt built endpoint defense around AI from day one at lower prices than incumbents, so it needs fast growth and progress toward profit to avoid being consolidated away rather than winning consolidation.14%
- These companies help firms find and secure exposures before attackers do, a job that grows more urgent as AI accelerates the pace of probing. · QualysIt tells companies where they are exposed before attackers find it, a job that grows more urgent as AI-generated attacks probe faster, and it is already profitable and steady., Tenable HoldingsIt maps what companies expose to the internet, a job that expands as AI lets attackers probe faster, so its broader exposure-management platform needs to keep winning deals beyond basic scanning., Varonis SystemsIt secures data itself by flagging who can access what, which matters more as companies feed sensitive data into AI tools, so its shift to cloud subscriptions needs to keep converting customers.10%
- These ETFs provide broad cybersecurity exposure, protecting the take if sector spending rises but individual stock picks underperform. · First Trust NASDAQ Cybersecurity ETFIt holds the broad cybersecurity sector, so it captures gains if security spending rises across the category rather than concentrating in single winners., Amplify Cybersecurity ETFIt holds the broad cybersecurity sector with different fund provider holdings than the other sector ETF, spreading ballast exposure if individual stock picks miss.9%
- Identity is the starting point for modern attacks, so consolidating buyers need a strong independent layer here. · OktaIdentity is where most modern attacks start, and it is the largest independent identity platform, so it needs to keep winning identity budgets instead of losing them to bundled alternatives.5%
- Cash10%