Cybersecurity, Redefined by AI — Structured Products the Valura Way

1. Field Notes from the Deal Room

"Every cyber‑attack headline is a reminder that data is the new gold — and thieves follow gold. The question for us is simple: how do we let clients mine that gold without stepping on the landmines?"
— Structured Products Team, Valura

Wednesday morning, 8:17 a.m. Our Bloomberg terminals flash red as yet another Fortune‑500 victim discloses a ransomware hit. Over flat whites, the 2Cents Capital Structured Products desk huddles around a single idea: cybersecurity is no longer an IT expense; it's an existential line item.

But an off‑the‑shelf ETF can't fully capture the nuance — or the volatility — of this theme. Investors want conviction and capital efficiency. That's where we come in.

2. Why Cybersecurity + AI Is a Now‑or‑Never Trade

• Attack surface on steroids — By 2027, >70% of enterprise apps will be cloud‑native (Gartner). Every new microservice widens the bullseye.
• AI: dual‑use tech — Generative models fuel both automated threat hunting (XDR, SOAR) and deep‑fake phishing campaigns. The arms race is algorithmic.
• Geopolitics in the matrix — U.S.–China chip friction, NATO–Russia skirmishes, Israel–Iran shadow ops: cyber‑warfare budgets are now defence budgets.
• Fragmented battlefield — 3,000+ vendors means ceaseless M&A (Cisco–Splunk, Broadcom–Symantec, Thales–Imperva). Consolidators command pricing power.
• Double‑digit TAM growth — The $245bn market (2024) compounds at 11‑13% CAGR through 2030. SaaS leaders print 70%+ gross margins.

Source: "Cybersecurity, Redefined by AI" trade‑idea deck, Lynceus Partners, June 2025.

3. Meet the Digital Gatekeepers — Stock Snapshots

3.1 CrowdStrike (CRWD)

One‑liner: Falcon's AI‑native XDR is eating endpoint share at break‑neck speed — 30% YoY topline without sacrificing margin.

3.2 Palo Alto Networks (PANW)

One‑liner: Prisma SASE + Cortex analytics = bidirectional cross‑sell flywheel; already comping >16% growth on a $8bn base.

3.3 Zscaler (ZS)

One‑liner: Zero‑Trust born‑in‑cloud pure‑play — de‑risked by hyperscaler channel alliances.

3.4 Fortinet (FTNT)

One‑liner: Hardware + software model prints 29% op‑margins while owning SME wallet share in emerging markets.

Quick take so far

These four charts all point one way: up. More data moves to the cloud, and hackers follow. The firms that stop attacks earn more money. That is why their share prices rise even when the rest of the market is quiet.

The next four stocks do the same job but in other ways — identity, hardware, or government contracts. Let's meet them.

3.5 Okta (OKTA)

One‑liner: Identity & access control at hyperscale; new management course‑correcting growth‑vs‑profit trade‑offs.

3.6 Thales (HO FP)

One‑liner: Sovereign‑grade security franchise; EU cyber defence budgets are a multi‑year tailwind.

3.7 SentinelOne (S)

One‑liner: 100% AI detection, land‑and‑expand in mid‑market; M&A take‑out chatter intensifying.

3.8 Cisco (CSCO)

One‑liner: Network dominance gives pricing power as security SKU attach rates climb.

4. From Theme to Term Sheet — Our Three‑Note Menu

4.1 Barrier Reverse Convertible Autocallable (BRCA)

Who is it for? Yield hunters willing to tolerate equity‑like downside beyond ‑50%.

Our twist: We engineered three baskets — Growth (FTNT/S/ZS), Blend (CSCO/PANW/HO FP) and Large‑Cap (CRWD/OKTA) — so allocators can dial credit risk.

4.2 100% Capital‑Guaranteed Callable Participation Note

Who is it for? Clients who equate 'loss' with <100% redemption but still want >cash IRR.

Our twist: Semi‑annual call optionality lets the issuer monetise volatility spikes — passing part of that premium to you via stepped coupons.

4.3 100% Capital‑Guaranteed Note with Call Spread

Who is it for? Investors chasing upside capture but allergic to issuer call risk.

Our twist: A capped call spread converts premium into deeper participation vs. vanilla protected notes, while keeping headline 'principal protection' intact.

5. How the Pieces Fit in a Portfolio

1. Core‑satellite — Swap out a high‑coupon bond sleeve with the BRCA to harvest equity vol‑risk premium.
2. Capital‑preservation bucket — Replace a portion of cash‑plus funds with either guaranteed note to raise expected yield without lengthening duration.
3. Barbell express — Pair BRCA (short vol) with 100% KG call‑spread (long vol) to neutralise Vega while maximising carry.

7. Final Word: Security Meets Structure

Cybercrime isn't cyclical; it's chronic. AI just upped the ante. With these three notes, we give investors a dial‑a‑risk toolkit to monetise the megatrend on their own terms.

Ready to put your capital behind the world's digital immune system?

Reach out: sp-ops@valura.ai

Disclaimer: For discussion purposes only. Not an offer or solicitation. Full terms, conditions and risk factors available on request. Capital at risk.