−8.9%
since Oct 8
The idea
Security budgets are consolidating, shifting away from dozens of point tools toward a handful of big AI-powered platforms, while AI itself makes attacks nastier and pushes spending higher. This basket leans into that shakeout: a core of consolidation winners, surrounded by cloud and network platforms, identity, AI-native defenders, and attack-surface specialists, with two sector ETFs for ballast so no single name can sink it.
What it owns
- These companies are consolidating fragmented security tool markets into unified platforms, replacing point products with integrated suites that deepen customer relationships. · Palo Alto NetworksIt advocates loudly for platform consolidation and bundles security tools to replace customers' point products, so its growth depends on customers continuing to consolidate onto its platform., CrowdStrike HoldingsIt started at the endpoint and keeps adding modules customers adopt instead of standalone tools, with growth driven by customers attaching more capabilities per deal., MicrosoftIt sells security as part of existing licenses companies already pay for, making it the default consolidation choice, and it owns the AI infrastructure that powers modern security., FortinetIt is converting its large firewall base into a broader platform, especially where networking and security merge, by upgrading customers into wider bundles.32%
- These companies replace legacy network perimeters and infrastructure with cloud-native services, capturing budget shifts as enterprises modernize their foundational security layers. · ZscalerIt replaces the old corporate network perimeter with a cloud service, exactly the kind of legacy infrastructure replacement this take expects to capture budgets., CloudflareIt sits in front of a major share of internet traffic and layers security and AI services on top, with growth driven by companies consolidating security onto its network platform., Akamai TechnologiesIts growth now comes from security and cloud compute rather than legacy content delivery, so the take needs security to keep becoming a larger share of revenue., Check Point SoftwareIt is a cheaper, profitable incumbent pushing its own consolidated platform, offering value-priced exposure to the same platform consolidation shift.20%
- These companies built security around artificial intelligence from inception, positioning them to detect and respond to AI-driven attacks faster than legacy tools can adapt. · RubrikIt protects and recovers data after ransomware hits and is building AI-driven security on top of that data visibility, with growth driven by rising stakes around data recovery., SentinelOneIt built defense around artificial intelligence from inception and competes at lower prices, needing sustained fast growth and profitability progress to win in consolidation., DatadogIt watches everything running in cloud environments and is extending that visibility into security, fitting the fewer-vendors consolidation story.14%
- These companies map and secure everything a company exposes to the internet, a job that becomes more critical as AI enables faster and wider threat discovery. · Varonis SystemsIt secures data itself by flagging who can access what, which matters more as companies feed sensitive data into AI tools, with growth from converting to cloud subscriptions., QualysIt maps where companies are exposed to attackers before they strike, a job that becomes more urgent as artificial intelligence makes threat discovery faster and wider., Tenable HoldingsIt maps everything a company exposes to the internet, a growing challenge as AI lets attackers probe defenses faster, driving broader exposure-management platform adoption.10%
- These ETFs track the broader cybersecurity sector, providing exposure to security spending growth trends even if individual vendor consolidation plays underperform. · First Trust NASDAQ Cybersecurity ETFIt holds the broad cybersecurity sector, so the basket still benefits if overall security spending rises even if different vendors than expected lead consolidation., Amplify Cybersecurity ETFIt holds the broad cybersecurity sector across a different fund provider and slightly different holdings, providing sector ballast if individual stock picks miss.9%
- Identity is the attack surface most exploited by modern threats, so consolidating buyers need specialized independent platforms to secure access and authentication. · OktaIdentity is where most modern attacks start, and it is the largest independent identity platform consolidating buyers need when building integrated security stacks.5%
- Cash10%