Malcolm Ethridge Buys More Zscaler Amidst Software Sector Downturn

Oracle's Credit Concerns and Zscaler Opportunity

• 📉 Oracle stock has seen a significant decline, down 22% month-to-date, with credit analysts recommending a shift in strategy from buying bonds to outright credit default swap protection.
• ⚠️ Concerns around Oracle's future debt commitments, estimated at $90 billion over three years, and its ability to secure financing without support from entities like Open AI are growing.
• 💡 Malcolm Ethridge expresses significant pause regarding Oracle, adhering to his rule of "when in doubt, don't," and has decided to take profits from his position.

Cybersecurity Sector Mispricing

• 📊 The broader software ETF is experiencing its worst month since January 2022, with cybersecurity names being unfairly grouped with the rest of the software sector.
• 🚀 Ethridge believes this market mispricing presents an opportunity, particularly in cybersecurity stocks like Zscaler.

Zscaler's Strong Fundamentals

• 💰 Despite a minor target trim, Ethridge bought more Zscaler after its earnings report, where the company showed 26% year-over-year growth in annually recurring revenue and beat expectations across the board.
• 🎯 Zscaler has successfully redone its Salesforce and is focused on becoming the platform for many companies with its ZLEX model, indicating it's "firing on all cylinders."
• 📈 With 45% of the Fortune 500 currently being secured by Zscaler, Ethridge sees it as a great buying opportunity for investors looking for growth beyond hyper-growth stocks like Nvidia or Alphabet.