Zscaler reports tonight, Hyperscalers hit $1T

Founder Spotlight

Jay Chaudhry at Zscaler

Our thesis on Zscaler is straightforward: Chaudhry has built the world's largest cloud security platform, and AI is now its biggest tailwind.

The Zero Trust Exchange sits between every interaction inside an enterprise network and grants or blocks access at machine speed. No competitor operates at this scale or with this gated architecture. ZS processes over 600 billion transactions a day and protects more than 45% of Fortune 500 workflows, riding a moat of switching costs, scale, and know-how that no startup could replicate without decades of investment.

AI is now replacing human users as the weak link in enterprise cybersecurity. Anthropic's Claude Mythos recently demonstrated that a powerful AI model can scan code, find vulnerabilities, and generate working exploits faster than any human team. Every enterprise rushing to adopt AI is placing its most sensitive data in the cloud, creating an urgent need for Zscaler's platform. Zero Trust works like an invisibility cloak: attackers cannot scan what they cannot see.

ZS reports tonight after the close. We expect a strong beat-and-raise driven by momentum in $1M+ deals, Z Flex bookings, and Zero Trust Everywhere customers (550 today vs. 130 a year ago). With roughly 4,000 of the 20,000 largest global enterprises onboard, penetration sits near 20%, leaving a long runway. ZS sold off with the broader software industry. In our view, it remains significantly undervalued relative to its earnings power.

A Stat That Travels

3.1×

Founder-led S&P 500 companies outperformed their non-founder peers over the 25 years through 2014, and by 2.1× over the most recent decade. Most ETFs barely own them. FFF owns the 100 founder-led names indices underweight or miss.

Source: Bain & Company analysis of companies in the 2014 S&P 500; indexed total shareholder return from 1990 to 2014.

Industry Insight

$1 Trillion in AI Capex by 2030

Hyperscaler AI infrastructure spend is on a trajectory toward $1 trillion in cumulative capex by 2030.

Meta, Microsoft, Alphabet, Amazon, and Oracle have each meaningfully ramped their AI-related capex plans over the past four quarters. That spending lands at the doorstep of the founder-led companies that supply the silicon, the systems, the data layer, and the power.

FFF's exposure is intentionally built around this buildout. On the compute side: NVDA (Jensen Huang) for silicon and the CUDA platform, plus DELL (Michael Dell) and ORCL (Larry Ellison) for the AI server and private-cloud layer. On the data side: SNOW (Sridhar Ramaswamy) and PLTR (Alex Karp) for where enterprise AI actually runs. On the power side: WULF, IREN, and CIFR for the energy that no hyperscaler can build fast enough on its own. The buildout is concentrated, founder-led, and accelerating.

Source: SEC filings (10-K), Bloomberg consensus estimates as of 5/11/26, internal forecasts for 2029–2030. Figures in USD billions.

Portfolio Pulse

Founders in Their Own Words

Jay Chaudhry · Zscaler

Q2 FY2026 Earnings

Our take. On the Q2 call management was "feeling really good going into H2 FY26," and the setup supports it. We expect a beat-and-raise quarter driven by Zero Trust, Flex, Data Security, and AI Security, with particular attention on AI agent commentary that the Street isn't yet modeling. As results validate the thesis, we expect the narrative to shift from AI displacement fears to how large of an AI beneficiary ZS will become. After the close today could be the turning point.

Bipul Sinha · Rubrik

Q4 FY2026 Earnings Call

Our take. While Zscaler secures the network (the doors, hallways, and traffic flowing in and out of the building, keeping bad actors out), Rubrik grants or denies each private AI agent access to the vault where the enterprise's most critical data lives and never leaves. RBRK's Annapurna platform allows each AI agent to read specific books in the vault but never check them out of the library. The data never moves, never creates a shadow copy, and never leaves its governed environment, making compliance with GDPR, HIPAA, and SOX dramatically cleaner. Once an enterprise builds its AI agent stack on Annapurna as the retrieval layer, the switching cost becomes a full re-architecture, not a simple contract negotiation. In a world where proprietary data is the competitive advantage, RBRK protects its customers' moats.

Conviction Corner

RIA Q&A on FFF's Role in a Portfolio

What role does FFF play in a portfolio?

FFF provides 100% Founder-Led exposure to 100 large US-listed public companies where the original Founder serves as a chief officer, often CEO or CTO. FFF serves as a complement with notable overlap with both SPY (15%) and QQQ (17%), as of 4/30/26, subject to change. The exposure is predominantly US large-cap growth equities, innovation themed, with a software 32% (not semiconductors 11%) tilt — the inverse tilt of QQQ.

Macro Minutes

U.S. Economic Releases · Week of May 26–29

What Printed

What We're Watching

Our take. U.S. consumers, whose spending makes up roughly two-thirds of GDP, are feeling the pressure of inflation, higher prices at the pump, fewer jobs, and general uncertainty. We view these forces as transitory. As the war ends, the AI buildout resolves supply shortages, and AI begins creating more jobs than it displaces, we expect confidence to rebound and Fed Chair Kevin Warsh's focus to shift to cutting rates to prevent deflation.

Earnings Edge

FFF Holdings Reporting

Washington Wire

Trump Signals a Possible Iran Peace Deal

“An Agreement has been largely negotiated, subject to finalization between the United States of America, the Islamic Republic of Iran, and the various other Countries... Final aspects and details of the Deal are currently being discussed and will be announced shortly. In addition to many other elements of the Agreement, the Strait of Hormuz will be opened… I don't make bad deals!”

President Trump, Truth Social, May 23, 2026

Our take. Roughly 20% of global oil flows through the Strait of Hormuz. A credible deal that restored flows would send gasoline prices lower, helping lower-income US consumers the most, easing inflation expectations, and giving the Fed more room to cut rates — a positive for US growth stocks and other risk assets. While we are optimistic, we have been close to a deal several times without an end to the war. We believe Trump needs to make a deal this summer or global oil reserves will drift too low, raising gasoline prices significantly and increasing the odds of a US recession.