Protection Matters Cybersecurity’s Winners and Losers Nuance has not been an especially strong suit of the AI Trade to date. Ask anyone over the past two months about what the rise of agentic coding agents means for cybersecurity and they’ll likely tell you it’s going to result in an explosion of demand. And they’re probably right – after all, agentic AI coding getting better has correlated pretty much 1:1 with frightening cybersecurity breaches increasing in frequency. That was distinctly not the case just six short months ago. In Q1, we watched the market punish cybersecurity stocks so aggressively that we were left searching for adjectives to describe the phenomenon. On January 24th, we found one: Since then, the market has rewarded us for opting to go with the obvious (“In the immediate term, supercharged agentic hacking is probably a good thing for cybersecurity stocks”) instead of the convoluted (“Here’s my 40 point explanation, relying on 8 unique predictions about the future, as to why SaaS will broadly be fine”). We dove deeper into the AI-related upside for cybersecurity names, such as Cloudflare (NET US), in sections of Agentic Utilities in March. A couple weeks later, most of them went on a tear. And a tear that was resilient against the momentum bloodshed relative to AI infrastructure and semis. Now, contrary to the days when cybersecurity was yet another baby in a whole lot of unwanted bathwater, shares of companies that can reasonably claim to defend you against the coming wave of frighteningly effective bad actors have outperformed. But we don’t want to suffer from the market version of Gell-Mann Amnesia – you know the one, where you see a selloff and go “It’s crazy the market can get this dislocated and create such obvious mispricing” and then never wonder if