−8.9%
since Oct 14
The idea
I think security budgets are consolidating fast: companies are ditching dozens of point tools for a few AI-powered platforms, while AI-driven attacks push spending higher. This basket leans into the platform leaders in security, cloud and network layers, identity, AI-native defenders, and attack-surface specialists, with two sector ETFs for ballast so no single name decides the outcome. I'm holding cash on the side to add if the market overreacts to a weak quarter, and I'm thinking in years, not weeks.
What it owns
- These companies are actively bundling security tools into platforms that replace point products, driving customer consolidation and total contract value growth. · CrowdStrike HoldingsIt started at the endpoint and keeps adding modules that customers adopt instead of standalone tools, so consolidation growth flows to the take as long as modules attach per deal., Palo Alto NetworksIt actively bundles security tools into a platform to replace customers' point products, so the take depends on platform adoption and total contract value staying on an upward path., MicrosoftIt sells security as part of licenses already in place, making it the default consolidation choice for many buyers, and owns the AI infrastructure both attackers and defenders use., FortinetIt is converting its huge firewall base into a broader platform where networking and security merge, so customers must upgrade into the wider bundle.32%
- These companies replace legacy network perimeters and infrastructure with cloud-based security services, capturing the shift in how companies secure their environments. · ZscalerIt replaces the corporate network perimeter with a cloud service, exactly the kind of legacy tool replacement that this take expects to fund growth., CloudflareIt sits in front of huge internet traffic volume and is layering security and AI services on top, so the take works as long as security revenue keeps compounding., 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 revenue., Check Point SoftwareIt is the cheaper, profitable incumbent pushing its own consolidated platform, giving the take a value-priced way to own the same consolidation shift.20%
- These companies built security around AI from inception or are extending existing products with AI-driven capabilities to defend against increasingly automated attacks. · RubrikIt protects and recovers data after ransomware hits and is building AI-driven security on top of that data, requiring fast subscription growth as attacks grow more costly., DatadogIt watches everything running in a company's cloud and is extending visibility into security, so it must keep converting monitoring customers into security customers., SentinelOneIt built defense around AI from day one and competes at lower prices, making this the higher-risk bet that needs continued fast growth and progress toward profit.14%
- These companies map and secure what companies expose to the internet, a job that becomes more urgent as AI-powered attacks can probe vulnerabilities faster. · QualysIt tells companies where they are exposed before attackers find it, a map that becomes more urgent as AI-powered attacks probe faster and more automatically., Tenable HoldingsIt maps everything a company exposes to the internet, and as AI lets attackers probe faster this job becomes more critical to ongoing exposure management., Varonis SystemsIt secures data itself by flagging who can access what, which matters more as companies feed sensitive data into AI tools and models.10%
- These funds hold broad cybersecurity sector exposure to benefit from overall security spending growth even if individual vendor picks underperform. · First Trust NASDAQ Cybersecurity ETFIt holds broad cybersecurity sector exposure, so the take benefits if security spending rises even if a different vendor than expected wins consolidation., Amplify Cybersecurity ETFIt holds broad cybersecurity sector exposure across a different fund provider than the other sector ETF, spreading ballast and keeping the take alive on broad spending trends.9%
- Identity security is the starting point for most modern attacks, so consolidating buyers need strong independent identity layers alongside their platforms. · OktaIt is the biggest independent identity platform, which consolidating buyers need as a serious layer since most attacks start with identity compromise.5%
- Cash10%