Core Insights - The NZS Growth Equity strategy reported a gross return of +4.09% and a net return of +3.93% for Q3, underperforming the Morningstar Global Target Market Exposure Index which had a return of +7.60% during the same period [2][3][4] - Year-to-date, the strategy achieved a gross return of +20.18% and a net return of +19.60%, slightly outperforming the Index's +18.26% [2][3] Performance Review - The equity market rally from Q2 2025 continued into Q3, leading to positive returns for the strategy, although it lagged behind the index [4] - Key contributors to returns included Information Technology, Communication Services, and Industrials, with Alphabet (GOOG) benefiting from a favorable antitrust ruling and increased AI market appreciation [5] - Detractors included Financials, Health Care, and Consumer Discretionary, notably Constellation Software (CNSWF) due to CEO transition and Fiserv (FI) lowering growth outlook [6] Portfolio Positioning - The portfolio saw elevated name turnover, with additions like Workday and Gartner, while exiting positions in NVIDIA and several other stocks [8][9] - The strategy's resilient weight increased to ~59%, with a modest decline in IT overweight due to active decisions [9] Focus Position: SailPoint, Inc. (SAIL) - SailPoint is positioned in identity governance and administration, crucial for zero-trust security, especially with the rise of AI vulnerabilities [14][15] - The total addressable market (TAM) for identity governance is expanding significantly due to the increasing prevalence of machine identities in AI environments [18] - SailPoint's growth potential is supported by its recent monetization framework for non-human identities, with expectations for margin improvement [19]

Core Insights - Zscaler is experiencing significant growth in its agentic AI cybersecurity solutions, with annual recurring revenue (ARR) for agentic security operations increasing by 85% year over year and agentic AI operations growing by 58% last year [1] - The company's revenue for fiscal year 2025 rose by 23% to $2.7 billion, outpacing the growth of the zero-trust security market, which is projected to grow at an annual rate of nearly 17% through 2030 [2][3] - Zscaler's stock price has increased by 59% in 2025, indicating strong market performance compared to competitors like Nvidia, which has seen a 32% appreciation [3][4] Company Performance - Zscaler's remaining performance obligations (RPO) surged by 31% to $5.8 billion, more than double the revenue generated in the latest fiscal year, suggesting a robust long-term revenue pipeline [7][8] - Analysts expect Zscaler to deliver strong double-digit growth over the next three fiscal years, although at a slower pace compared to fiscal 2025 [9] - Recent upward revisions in consensus revenue estimates reflect the company's improving RPO and the growth potential in AI-focused cybersecurity niches [10] Market Position - The adoption of agentic AI in cybersecurity is expected to grow at a compound annual growth rate (CAGR) of 34% through 2033, potentially reaching $322 billion in annual revenue [6] - Zscaler's valuation at 16 times sales is considered attractive compared to Nvidia's price-to-sales ratio of 25, with expectations that Zscaler's growth will surpass Nvidia's in the coming years [11][12]