Zscaler, Inc. is a cloud security company operating worldwide. It offers cyberthreat protection products such as Zero Trust SASE, Zscaler Internet Access, Zscaler Private Access, Zero Trust Browser, Zscaler Digital Experience, Zero Trust Branch, and Zero Trust Cloud. The company also provides Security for AI, data security services, and Agentic Security Operations solutions. It serves industries including automotive, airlines and transportation, consumer goods and retail, energy, financial services, healthcare, insurance, manufacturing, media and communications, public sector and education, technology, and telecommunications. Formerly known as SafeChannel, Inc., it changed its name to Zscaler, Inc. in August 2008. Zscaler was incorporated in 2007 and is headquartered in San Jose, California.
Zscaler's strong demand and partnerships offset competitive and legal worries
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Z-Flex program drives strong demand Zscaler's Z-Flex program generated over $480 million in total contract value in the third quarter, up more than 60% from the prior quarter. Annual recurring revenue rose 25% to over $3.5 billion. This shows customers are committing more, which supports future revenue and should lift the stock.
This is a new positive demand signal that directly boosts Zscaler's growth outlook.
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Aston Martin F1 cybersecurity deal Zscaler announced a multi-year partnership with the Aston Martin Aramco Formula One Team to protect its car design, race strategy, and real-time data. The stock jumped 6% on the news. This high-profile deal validates Zscaler's technology and could attract more customers.
It's a new contract win that signals demand and boosts investor confidence.
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CIO survey shows solid spending plans A Jefferies survey of 40 CIOs found that 43% plan to increase spending on Zscaler in 2026, even as cybersecurity budgets grow in line with IT. This indicates steady demand, though the pace of budget increases may be gradual.
It provides forward-looking demand evidence that supports Zscaler's growth narrative.
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Pomerantz investigation into possible securities fraud Pomerantz LLP is investigating Zscaler for possible securities fraud after the company's revenue guidance missed expectations, causing a 31% stock drop. Legal uncertainty can weigh on the stock and distract management, though the investigation is at an early stage.
It's a new legal risk that could pressure the stock and investor sentiment.
Latest
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AI security bookings surge, but growth slowdown and CRO exit weigh on Zscaler
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AI security bookings top $100M, up 50% sequentially Zscaler's AI security bookings crossed $100 million over the past year and grew over 50% in the latest quarter. Customers using its Zero Trust Everywhere product jumped to 950 from 300, and it closed a record number of $1 million deals. This shows its AI bet is gaining real traction, supporting the stock.
This is the core new evidence that Zscaler's AI security products are selling, directly addressing the growth question.
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Agentic SOC launch deepens AI security platform Zscaler launched Agentic SOC, an AI-powered security operations platform co-developed with Anthropic and OpenAI. It uses AI agents and over 750 billion daily zero trust transactions to automate threat response. This expands its product lineup and could drive future demand, supporting the stock.
The new product launch is a fresh catalyst that could become a second growth engine, directly relevant to the AI security narrative.
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Chief Revenue Officer steps down, successor named Zscaler appointed Ross Tackett as Chief Revenue Officer effective October 1, 2026, succeeding Mike Rich, who is stepping down for personal reasons. Leadership changes in sales can create uncertainty about execution, and the stock fell 4% on the news.
A CRO transition is a new event that adds execution risk and weighed on the stock, providing a fair counterweight.
Q3 2026
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AI security demand strong, but growth slowdown and cost cuts weigh
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AI security momentum and strong Q4 results Zscaler's AI security bookings surpassed $100 million, up over 50% from the prior quarter, and Q4 EPS of $1.19 on $898 million revenue beat estimates. A partnership with Schwarz Digits for a European sovereign cloud platform also expanded its reach.
This shows the company is capitalizing on AI-driven demand, a key growth driver for the stock.
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Growth slowdown and margin pressure Fiscal 2027 revenue growth is guided to slow to about 17% from 25%, and free cash flow margin was cut to roughly 23% from 27% due to higher capital spending. This signals weaker future profitability and growth.
Guidance cuts directly impact investor expectations for future earnings and cash flow.
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Workforce reduction and executive departure Zscaler announced a 3% workforce reduction and its Chief Revenue Officer exited. These moves raised concerns about execution and morale, weighing on investor sentiment.
Management changes and layoffs can signal internal challenges and affect future performance.
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AI supply-chain exposure and shelf filing Zscaler was among 2,500+ firms potentially exposed in the LiteLLM AI supply-chain incident, and it filed a $1.69 billion shelf offering. These raised concerns about security risks and potential share dilution.
Supply-chain incidents can damage reputation, and shelf filings often precede equity issuance, diluting existing shares.
News & notes movingZS
United States
Cybersecurity & Digital Trust▲
Zscaler Teams With IBM and Red Hat to Shield Private Apps From AI Threats
Zscaler announced a collaboration with IBM and Red Hat to protect private applications during the window between vulnerability disclosure and patch deployment. The collaboration combines Zscaler Autonomous Application Shield, delivered through the Zscaler Zero Trust Exchange security platform, with Lightwell from IBM and Red Hat to provide adaptive, application-specific protection alongside validated software remediation in a single coordinated response. Zscaler cited Mandiant's M-Trends 2026 report, which found the mean time to exploit a vulnerability has fallen below zero, meaning vulnerabilities are increasingly exploited before a public patch exists. Under the arrangement, Zscaler App Connectors continuously assess each private application's exposure points and vulnerabilities, adaptive protections are applied inline in real time when a new vulnerability emerges, and Lightwell then provides validated remediations for affected open source software. Joby Menon, Senior Vice President of Product Management at Zscaler, said the collaboration brings together inline, application-specific protection and validated remediation to help customers reduce risk during that gap, while Gunnar Hellekson, vice president and general manager of Lightwell at Red Hat, said AI is shrinking the exploitation window from months or weeks to hours and minutes. Autonomous Application Shield is currently available through an Early Access Program, and Zscaler said availability, capabilities, and timing of the collaboration are subject to change.
Cybersecurity & Digital Trust › Network Security & SASE ▲Technology
Cybersecurity & Digital Trust › Cloud & Workload Security ▲Technology
Cybersecurity & Digital Trust › Endpoint & Network Security ▲Technology
Cybersecurity & Digital Trust › Identity & Access Management Technology
0ZC.XETRA · Technology · Positive Zscaler's Autonomous Application Shield collaboration with IBM and Red Hat protects private apps from AI-era threats.
ZS · Technology · Positive Zscaler launches its Autonomous Application Shield collaboration with IBM and Red Hat to protect private apps from AI-era threats.
IBM · Technology · Positive IBM's Lightwell is combined with Zscaler's shield to provide validated remediation for vulnerable private apps.
Red Hat, Inc. · Technology · Positive Red Hat's Lightwell provides validated open-source remediation in the Zscaler-IBM collaboration.
Zscaler Shares Gain 11.8% as Earnings Estimates Surge
Zscaler shares have returned +11.8% over the past month, outpacing the Zacks S&P 500 composite's +0.6% change, while the Zacks Security industry gained 14.6% over the same period. The cloud-based information security provider is expected to post earnings of $1.16 per share for the current quarter, a year-over-year change of +20.8%, and the Zacks Consensus Estimate has changed +678.7% over the last 30 days. For the current fiscal year, the consensus earnings estimate of $4.91 indicates a year-over-year change of +16.6%, and for the next fiscal year the consensus estimate of $5.54 indicates a change of +12.9%. Consensus sales estimates stand at $937.61 million for the current quarter, $3.93 billion for the current fiscal year and $4.55 billion for the next fiscal year, indicating year-over-year changes of +19%, +17.2% and +15.8%, respectively. Zscaler reported revenues of $898.18 million in the last reported quarter, a year-over-year change of +24.9%, with EPS of $1.19 versus $0.89 a year ago, beating the Zacks Consensus Estimate of $877.14 million by +2.4% on revenue and by +9.17% on EPS. Zscaler is rated Zacks Rank #3 (Hold) and is graded F on the Zacks Value Style Score, indicating it trades at a premium to its peers.
0ZC.XETRA · Capital · Positive Zscaler's consensus earnings estimate surged +678.7% over 30 days and it beat last quarter's revenue/EPS estimates, driving the stock's 11.8% gain.
ZS · Capital · Positive Zscaler's consensus earnings estimate surged +678.7% over 30 days and it beat last quarter's revenue/EPS estimates, driving the stock's 11.8% gain.
Zscaler ThreatLabz Report Warns AI-Driven Ransomware Is Reshaping Cyber Threats
Zscaler released its ThreatLabz 2026 Ransomware Report on 1 October 2026, detailing new attack patterns including large-scale AI-driven ransomware operations that automate intrusion, data theft, and victim targeting. Researchers reported a rise in executive-focused data theft and misuse of enterprise tools such as Microsoft Teams to gain access. The report reinforces Zscaler's narrative that AI-driven threats are expanding and that security budgets are shifting toward Zero Trust and data protection, though it does not address whether the company can convert that awareness into larger multi-year contracts and improved net retention without higher sales and operating costs. Investors will be watching how management frames AI ransomware trends at the October 6, 2026 Investor Day and whether disclosures around Z-Flex, Security for AI, and Agentic SecOps show measurable traction in annual recurring revenue and product adoption within Global 2000 accounts.
Cybersecurity & Digital Trust › Network Security & SASE ▲Demand
Cybersecurity & Digital Trust › Endpoint & Network Security ▲Demand
Cybersecurity & Digital Trust › Cloud & Workload Security Demand
0ZC.XETRA · Demand · Positive Zscaler's ThreatLabz report reinforces its narrative that AI-driven threats are expanding and security budgets are shifting toward Zero Trust and data protection.
ZS · Demand · Positive Zscaler's ThreatLabz report reinforces its narrative that AI-driven threats are expanding and security budgets are shifting toward Zero Trust and data protection.
Cloudflare Sees AI Agent Security Demand Lifting Zero Trust and SASE Growth
Cloudflare said growing enterprise interest in securing artificial intelligence agents is creating a new opportunity for its Zero Trust and SASE security business. On the second-quarter 2026 earnings call, management said the biggest reason large companies are reaching out is that they know they need to adopt AI but want to do so securely, and the company believes its agents-first security model can help it take share from traditional Zero Trust vendors that focus mainly on human users. In one example, a large U.K. government agency that was evaluating a first-generation Zero Trust provider canceled its existing request for proposal and is now reevaluating the project with an agents-first approach after discussing its AI agent plans with Cloudflare. Management said its SASE and Zero Trust platforms have gained share significantly over the past six months, helped by its developer platform and its focus on AI, while more than 50% of traffic on its network was nonhuman in the second quarter and more than 80% of major AI companies are already Cloudflare customers. Competitors are moving in the same direction: Zscaler ended fiscal 2026 with 950-plus Zero Trust Everywhere customers, up from more than 350 a year earlier, and Palo Alto Networks said Prisma AIRS crossed $100 million in ARR within four quarters of general availability with more than 800 customers by the end of fiscal 2026, while agentic traffic on its SASE platform rose ninefold over the past nine months and SASE bookings grew 40% in fiscal 2026. Cloudflare shares have jumped 77% year to date, and the Zacks Consensus Estimate for its 2026 earnings stands at $1.26 per share, unchanged over the past 30 days and implying a 35.5% increase from the previous year.
Cybersecurity & Digital Trust › Network Security & SASE ▲Demand
Cybersecurity & Digital Trust › AI Security & Agent Guardrails ▲Demand
Cybersecurity & Digital Trust › Workforce & Customer IAM (SSO/MFA) ▲Demand
Artificial Intelligence › Agentic AI & Autonomous Workflows ▲Demand
NET · Demand · Positive Cloudflare says AI-agent security interest is driving enterprise adoption and share gains in its Zero Trust and SASE business, with a UK agency re-evaluating its RFP around an agents-first approach.
0ZC.XETRA · Competition · Neutral Zscaler is mentioned only as a competitor with 950-plus Zero Trust Everywhere customers, not as the subject of the news.
PANW · Competition · Neutral Palo Alto is cited as a competitor moving in the same agentic-security direction, with Prisma AIRS ARR over $100M and SASE bookings up 40%, but the article does not state a direct impact on it.
ZS · Competition · Neutral Zscaler is mentioned only as a competitor with 950-plus Zero Trust Everywhere customers, not as the subject of the news.
Zscaler Promotes Ross Tackett to Chief Revenue Officer
Zscaler has promoted Ross Tackett to Chief Revenue Officer, succeeding Mike Rich. Mike Rich will remain with the company as a strategic advisor to support the leadership transition in Zscaler's global sales organization. Tackett brings decades of enterprise sales leadership experience from major technology companies to the CRO role. The change puts Tackett in charge of global sales and partnerships as Zscaler pushes for larger multi-year deals and deeper wallet share, including newer AI security and Agentic SOC offerings sold in competition with Palo Alto Networks and CrowdStrike. The company's investment story rests on whether its AI-first, zero-trust security platform and heavy go-to-market spending can translate into durable, efficient expansion, with the article pointing to a $197 fair value for Zscaler.
Cybersecurity & Digital Trust › Network Security & SASE Talent
0ZC.XETRA · Capital · Neutral Promotion of Ross Tackett to CRO is a leadership change tied to the investment story and $197 fair value; no clear product-demand or financial event.
ZS · Capital · Neutral Promotion of Ross Tackett to CRO is a leadership change tied to the investment story and $197 fair value; no clear product-demand or financial event.
Akamai Technologies shares jumped 23% after the company announced a seven-year, $11.6B agreement with Anthropic to provide cloud infrastructure and software supporting CPU workload growth at scale, a deal that could reach $20B if certain conditions are met. As part of the agreement, Akamai granted Anthropic warrants representing about 5% of its common stock, with 2% expected to vest initially and the remaining 3% tied to an additional $9B in cloud service purchases over the seven-year term. Fathom Holdings rose 23% and Neighborhood Intelligence gained 4% after the companies agreed to explore an alternative transaction replacing their previously announced merger agreement, under which NXH would contribute its roughly 38.8% direct and indirect stake in tZERO Group, Medici-related fund assets, and its investment in GrainChain to Fathom, with the contributed digital assets valued at no less than $130M, in return for newly issued Fathom shares and an expected controlling interest in Fathom. Select Water Solutions climbed 6% after agreeing to acquire private water midstream company Pilot Water Solutions for $700M in cash and stock, plus up to $15M in contingent consideration, comprising $600M in cash and $100M in Class A shares, with debt financing commitments from JPMorgan Chase and Bank of America and an expected close in Q4 2026. Scholastic plunged 12% after reporting wider-than-expected FQ1 losses and a 4% Y/Y revenue decline driven by soft educational spending, though it reaffirmed its full-year 2027 outlook for revenue growth of 2% to 4%, adjusted EBITDA of $135M to $145M, and free cash flow of $35M to $40M. Zscaler fell 4% after appointing Ross Tackett as Chief Revenue Officer effective October 1, 2026, succeeding Mike Rich, who is stepping down for personal reasons but will remain as a strategic advisor through December 31, 2026.
AKAM · Demand · Positive Akamai announced a seven-year $11.6B cloud infrastructure deal with Anthropic, potentially reaching $20B.
FTHM · Capital · Positive Fathom agreed to explore an alternative transaction replacing its prior merger, with NXH contributing assets valued at no less than $130M for newly issued Fathom shares and a controlling interest.
SCHL · Capital · Negative Scholastic reported wider-than-expected FQ1 losses and a 4% Y/Y revenue decline on soft educational spending.
WTTR · Capital · Positive Select Water Solutions agreed to acquire Pilot Water Solutions for $700M in cash and stock.
ZS · Capital · Negative Zscaler fell after appointing a new Chief Revenue Officer as its current CRO steps down.
NXH · Capital · Positive Neighborhood Intelligence agreed to explore an alternative transaction replacing its prior merger with Fathom, contributing its ~38.8% tZERO stake and other digital assets valued at no less than $130M for newly issued Fathom shares and an expected controlling interest in Fathom.
Zscaler Launches Agentic SOC AI Security Platform With Anthropic and OpenAI
Zscaler launched its Agentic SOC, an AI-first security operations platform that combines proprietary telemetry, a large decoy mesh network, and integrated zero trust controls with third-party tools to detect and contain threats at machine speed. The platform uses AI agents co-developed with Anthropic and OpenAI, trained on a decade of frontline SOC experience and powered by more than 750 billion daily zero trust transactions to automate complex threat investigation and response. The launch follows the June expansion of Zscaler's Zero Trust SASE with the ZAgent Framework and new browser, endpoint, and cloud controls, both moves deepening Zscaler's role as an integrated security and AI operations platform. Zscaler's narrative projects $5.1 billion revenue and $132.0 million earnings by 2029, yielding a $196.95 fair value, a 6% downside to its current price, while some of the lowest estimate analysts assume revenue of about US$5.2 billion and earnings near US$50 million by 2029 and worry that acquisitions and aggressive AI investment around Agentic SOC could keep margins subdued even if topline keeps growing.
Cybersecurity & Digital Trust › Security Operations (SIEM/SOAR/XDR/MDR) Technology
Artificial Intelligence › Agentic AI & Autonomous Workflows ▲Technology
Cybersecurity & Digital Trust › Network Security & SASE Competition
0ZC.XETRA · Technology · Positive Same Zscaler Agentic SOC launch, the AI-first security operations platform, applies to this Zscaler listing.
ZS · Technology · Positive Zscaler launched its Agentic SOC AI-first security operations platform co-developed with Anthropic and OpenAI, deepening its integrated security and AI operations offering.
Anthropic · Technology · Positive Anthropic co-developed the AI agents powering Zscaler's new Agentic SOC platform.
OpenAI · Technology · Positive OpenAI co-developed the AI agents powering Zscaler's new Agentic SOC platform.
Zscaler AI Bookings Jump Over 50% Sequentially in Fiscal Q4
Zscaler's Security for AI bookings rose more than 50% sequentially in the fourth quarter of fiscal 2026, with AI Protect bookings crossing $100 million over the trailing 12 months. About 70% of Security for AI deals in the quarter also included Data Security, and the company introduced Zero Trust Exchange for Agents and Endpoint AI Security, which are expected to scale in the second half of fiscal 2027. Zscaler reported fourth-quarter revenues of $898.2 million, up 25% year over year, while annual recurring revenues rose 25% to $3.77 billion, though fiscal 2027 revenue guidance implies growth of about 17%. Rivals are expanding too: Palo Alto Networks' Prisma AIRS reached about $120 million in ARR within roughly a year of general availability and exceeded 800 customers, while CrowdStrike's AIDR ending ARR nearly tripled from the first quarter. ZS shares have plunged 12.3% year to date, and the stock carries a Zacks Rank #3 (Hold).
Palo Alto Networks SASE Bookings Jump 40% as Displacements Hit $400 Million
Palo Alto Networks said its SASE bookings grew 40% in fiscal 2026, with the company displacing legacy vendors in nearly 100 customer accounts representing more than $400 million in total contract value, roughly double the prior year's displacement volume. Management said PANW is currently the No. 2 player in SASE and aims to become the market leader over the next five to seven years, helped by integrating SASE with its firewall and SD-WAN products so existing customers can standardize on one vendor. In the fourth quarter of fiscal 2026, a global telecom leader signed a $126 million agreement to expand its next-generation firewall footprint while replacing legacy proxy providers with Prisma Access for SASE, and agentic traffic on the company's SASE platform has increased 9x over the past nine months. Rival Fortinet said its SASE Firewall business grew 34% in the second quarter of 2026 to more than $2 billion, while Unified SASE billings rose 35%, and Zscaler reported ARR up 25% year over year in the fourth quarter of fiscal 2026. Palo Alto Networks shares have jumped 104.1% year to date versus a 92.6% gain for the Zacks Security industry, and the stock trades at a forward price-to-sales ratio of 21.31X against an industry average of 19.13X.
Cybersecurity & Digital Trust › Network Security & SASE ▲Demand
Cybersecurity & Digital Trust › Endpoint & Network Security Competition
PANW · Demand · Positive Palo Alto Networks' SASE bookings jumped 40% in fiscal 2026, displacing legacy vendors in nearly 100 accounts worth over $400 million in total contract value.
FTNT · Demand · Positive Fortinet's SASE Firewall business grew 34% in Q2 2026 to over $2 billion with Unified SASE billings up 35%, showing strong demand for its SASE products.
0ZC.XETRA · Demand · Positive Zscaler reported ARR up 25% year over year in Q4 fiscal 2026, indicating continued demand for its SASE offerings.
ZS · Demand · Positive Zscaler reported ARR up 25% year over year in Q4 fiscal 2026, indicating continued demand for its SASE offerings.
Zscaler reported fourth-quarter revenue up 25% year over year to $898.2 million, with ARR rising 25% to $3.77 billion, though organic ARR excluding Red Canary's $141 million contribution grew 20% to $3.63 billion. FBN Securities reiterated an Outperform rating on September 4 and raised its price target to $190 from $175, citing improving underlying momentum. Non-GAAP operating margin hit a record 24% in the quarter, while GAAP net loss per diluted share narrowed to $0.02 from $0.11 a year earlier. For the first quarter of fiscal 2027, Zscaler guided revenue to $935 million to $939 million, up 19% year over year, with a non-GAAP gross margin of about 80%. However, the company's fiscal 2027 ARR guidance of $4.396 billion to $4.426 billion implies growth of only 16.6% to 17.4%, raising concerns that Zscaler could shift from a 25% growth cybersecurity company to a high-teens grower and face multiple compression amid competition from Palo Alto Networks and CrowdStrike.
Retail traders chased cyber options but skipped the stocks, Vanda says
Retail investors piled into cybersecurity options during the sector's recent rally but stayed net sellers of some underlying shares, according to Vanda Analytics. Retail out-of-the-money call turnover across CrowdStrike, Palo Alto Networks and Zscaler jumped into the 98th percentile of its history over the past five sessions, yet retail investors were net sellers of $6.4M of Palo Alto Networks and $3.5M of Zscaler in the previous session. Institutional positioning was also light ahead of the move, with Vanda's institutional call-put ratio score for its cybersecurity basket at -0.27 as of Sept. 14, below its median since 2017 and well below the +0.84 recorded in January. The positioning came before the Global X Cybersecurity ETF recorded its biggest one-day gain on record, Vanda said. Viraj Patel, chief innovation officer and global market strategist at Vanda Analytics, said retail investors participated in the rally mainly through short-dated options rather than by rebuilding outright positions in the underlying stocks, leaving potential room for retail cash buying to increase if the rally extends.
0ZC.XETRA · · Neutral Same Zscaler entity referenced via its German listing; retail net selling of shares amid options-driven rally, no company-specific driver.
PANW · · Neutral Retail investors were net sellers of $6.4M of Palo Alto shares while chasing sector options; no company-specific driver.
ZS · · Neutral Retail investors were net sellers of $3.5M of Zscaler shares while chasing sector options; no company-specific driver.
CRWD · · Neutral Mentioned only as part of the cybersecurity options rally; retail call turnover spiked but no company-specific development.
CrowdStrike, Zscaler Jump 12% as AI Safety Warnings Spark Security Bid
Cybersecurity pure-plays surged Monday after weekend AI safety warnings from Anthropic CEO Dario Amodei and OpenAI CEO Sam Altman drove a narrow sector bid. CrowdStrike rose 12% to $232.08, Zscaler rose 12% to $183.97, and Palo Alto Networks jumped 11% to $366.40 in midday trading, while Okta joined the move as the group's identity-security peer. The First Trust NASDAQ Cybersecurity ETF rose just 4% and the SPDR S&P 500 ETF Trust fell 0.7%, leaving the wider networking and infrastructure membership of the sector fund largely out of the move. Amodei published a 3,800-word essay on Saturday calling on frontier AI companies to slow the pace at which they improve model capabilities, and Altman said he agreed, warning early Monday about losing control of the future to AI. CrowdStrike CEO George Kurtz responded over the weekend, arguing frontier labs will keep advancing regardless and that the cybersecurity industry's job is to make that development safer, after the company's Fal.Con conference introduced Falcon Guardian, SafeMind and an Agentic Identity Provider, with RBC Capital, Raymond James and Wedbush each reiterating positive ratings and raising price targets. CrowdStrike is up 98% year to date and Palo Alto is up 99%, while Zscaler is down 18% year to date; CrowdStrike's next catalyst is its Q3 FY27 report, with guidance of $1.523 billion to $1.529 billion in revenue and non-GAAP diluted EPS of $0.31, after Q2 FY27 total revenue grew 25.8% year over year to $1.47 billion and record net new ARR of $332.8 million.
CRWD · Demand · Positive CrowdStrike jumped 12% as AI safety warnings drove a sector bid, with its CEO positioning cybersecurity as the safeguard for frontier AI development.
CRWD · Capital · Positive RBC Capital, Raymond James and Wedbush each reiterated positive ratings and raised price targets on CrowdStrike.
0ZC.XETRA · Demand · Positive Zscaler rose 12% amid the narrow cybersecurity sector bid driven by AI safety warnings.
PANW · Demand · Positive Palo Alto Networks jumped 11% as part of the cybersecurity sector bid sparked by AI safety warnings.
ZS · Demand · Positive Zscaler rose 12% amid the narrow cybersecurity sector bid driven by AI safety warnings.
Zscaler CEO Cites AI Security Surge and Zero-Trust Momentum at Citi Conference
Zscaler CEO and Founder Jay Chaudhry said at Citi's TMT Conference that the company entered fiscal 2027 with an expanded product portfolio, improving sales momentum and growing customer interest in AI security and zero-trust architecture. Chaudhry said Zscaler expanded its AI-security lineup from one product a year ago, GenAI Security, to six integrated products, and that security-for-AI bookings exceeded $100 million over the 12 months disclosed after the third quarter, with fourth-quarter bookings in the category up 50% sequentially. Net-new annual recurring revenue growth rose from 7% in fiscal 2025 to 10% in the first half of fiscal 2026 and 17% in the fourth quarter, while customers using Zero Trust Everywhere increased from 300 a year earlier to 950 and the company completed a record number of $1 million deals. Zscaler launched Agentic SecOps at the conference, supported by its Red Canary acquisition, and introduced Z Flex, a flexible purchasing structure whose participating customers generated 30% higher upsell than non-participants in its first year. Chaudhry said AI security and Zero Trust Everywhere are the areas most likely to provide upside in fiscal 2027, and that he is watching adoption of the company's Agentic Exchange, which is in limited availability.
Zscaler launches Agentic SOC to contain AI-driven threats
Zscaler has announced the launch of Zscaler Agentic SOC, a new security operations solution designed to detect, investigate, and respond to AI-driven threats at machine speed. The platform combines Zscaler's zero trust telemetry, which processes 750 billion daily transactions, with specialized AI agents trained on over a decade of frontline security experience, and integrates with third-party tools. Zscaler has partnered with Anthropic and OpenAI to incorporate frontier AI models, enhancing the reasoning and accuracy of its agents. The solution is available globally today, aiming to reduce alert noise and automate threat containment for security teams.
Zscaler Reports Revenue and ARR Growth, Plans Workforce Reduction
Zscaler reported fiscal fourth-quarter GAAP revenue of $898.2 million, up 25%, and company-defined annual recurring revenue (ARR) increased 25% to $3.771 billion, but the company also announced a restructuring plan to cut about 3% of its workforce. Excluding the Red Canary acquisition, ARR was $3.630 billion, up 20%, with net new ARR growing 17%. The restructuring is expected to incur $30 million to $33 million in charges, primarily for severance and benefits. Non-GAAP operating margin improved to 24% from 22%, while operating cash flow rose to $279.3 million from $250.6 million. For fiscal 2026, non-GAAP free cash flow increased to $779.1 million from $726.7 million, though the margin declined to 23% from 27%. Fiscal 2027 guidance projects revenue growth of 16.6% to 17.5% and ARR growth of 16.6% to 17.4%, with a free-cash-flow margin of 23.0% to 23.5%. Quarterly free cash flow fell sharply to $60.8 million from $171.9 million, and the margin dropped to 7% from 24%, as capital expenditures rose to $218.5 million from $78.7 million. The company recorded a GAAP operating loss of $15.5 million, with stock-based compensation totaling $215.2 million. Hedge fund holdings increased to 52 funds from 46 in the prior quarter.
Zscaler Beats Q2 Estimates, AI Security Drives Growth
Zscaler reported fiscal second-quarter revenue of $898.2 million, up 24.9% year over year and beating analyst estimates of $877.2 million, while non-GAAP earnings per share of $1.19 surpassed consensus by 9.2%. The company guided third-quarter revenue to $937 million at the midpoint, above expectations, and raised its full-year adjusted EPS guidance to $4.88, beating estimates by 6.1%. Management attributed the strong performance to accelerating adoption of its Zero Trust platform and a surge in AI security bookings, which grew over 50% sequentially. However, shares fell after the announcement, reflecting concerns about sales leadership transitions and integration costs. Zscaler also announced a workforce restructuring affecting about 3% of employees to reallocate resources toward AI initiatives.
Jim Cramer Notes Many Zscaler Shorts After Strong Q4 Results
Jim Cramer highlighted the large number of short sellers in Zscaler Inc. after the cybersecurity firm reported fiscal fourth-quarter results that beat expectations. Revenue grew 25% annually to $898 million, and non-GAAP earnings per share rose 33% to $1.19, both surpassing analyst estimates of $807 million and $1.09. The company's annual recurring revenue jumped 35% to $3.77 billion, with net new ARR of $246 million, and excluding the Red Canary acquisition, net new ARR growth accelerated to 17% from 7% a year earlier. Zscaler also exited the quarter with over 785 customers each generating more than $1 million in ARR and a 50% penetration into the Fortune 500. However, the company's fiscal 2027 revenue guidance of $3.91 billion to $3.94 billion implies a growth slowdown to between 16.6% and 17.5%, compared with 25% growth in fiscal 2026, while R&D expenses rose 34% to $903 million. Cramer noted that 5.9% of Zscaler's float is short, compared with less than 3% for peers Palo Alto Networks and CrowdStrike, and he remains enthusiastic about the cybersecurity sector.
Zscaler CEO says AI drives demand, defends conservative 2027 outlook
Zscaler reported quarterly earnings with revenue up 25% and offered a conservative 2027 outlook, projecting roughly 17% revenue growth versus about 25% in 2026. CEO Jay Chaudhry told Market Domination that AI is a big tailwind, driving demand not only for AI security but for securing everything via zero trust, as agentic AI creates new vulnerabilities. He cited record million-dollar-plus deals and crossing 50% of Fortune 500 companies as customers. Chaudhry expressed bullishness on FY27, saying the company's full AI solutions combined with zero trust architecture will make the year strong.
Midday movers: Sandisk, Tesla, Lululemon, Quanex, AMC & more
In midday trading, several stocks made notable moves. Guidewire Software plummeted 21% after issuing weaker-than-expected current-quarter revenue guidance of $372 million to $378 million, below the LSEG consensus of $387 million. Tesla dropped 6% following a National Highway Traffic Safety Administration investigation into whether its Cybercab meets federal safety standards, after the company launched robotaxis in Austin. Sandisk and KLA rallied more than 8% and 7% respectively, as the semiconductor sector gained ahead of the long weekend, with the VanEck Semiconductor ETF (SMH) up over 2% and the Roundhill Memory ETF (DRAM) up 5%. Quanex Building Products surged 19% after beating third-quarter estimates with adjusted earnings of 79 cents per share on revenue of $501.8 million, versus the FactSet consensus of 66 cents and $497.5 million. AMC Entertainment rose 6.5% after CEO Adam Aron criticized Robinhood's stock tokens as "contemptible, outrageous, disgusting," while Robinhood slipped nearly 1%. Credit monitoring firms Equifax, TransUnion, and Fair Isaac fell after Federal Housing Finance Agency Director Bill Pulte said they have been "overcharging Americans for too long," with Fair Isaac down over 15%, Equifax down 6.8%, and TransUnion down over 7%. Smith & Wesson gained 6% on an earnings beat, reporting 6 cents per share versus an expected loss of 6 cents, on revenue of $112.6 million versus the $98.7 million consensus. Lululemon Athletica tumbled 17% after forecasting current-quarter earnings of 93 to 98 cents per share on revenue of $2.29 billion to $2.32 billion, below analyst expectations of $2.40 per share and $2.53 billion. Zscaler slipped 5% despite beating earnings estimates, while Adobe fell 6% after announcing Anil Chakravarthy as its next CEO. Asana dropped 14% on weak guidance, Samsara advanced 4% on strong full-year outlook, UiPath lost 16% despite in-line guidance, and Oxford Industries sank 17% after cutting its full-year guidance.
Zscaler's Q4 Earnings Could Soar on AI Cybersecurity Demand
Zscaler reports its fiscal fourth-quarter results after the market closes on September 3, and investors are watching whether the cybersecurity firm can beat modest expectations amid rising AI-driven demand. Management's guidance calls for roughly 22% year-over-year revenue growth, but the company has a history of outperforming its own forecasts, having reported 25% growth in both revenue and ARR last quarter. The key catalyst could be a significant raise to its fiscal 2027 outlook, especially after peers CrowdStrike and Palo Alto Networks posted strong results tied to AI cybersecurity spending. Zscaler's remaining performance obligation, a measure of its revenue backlog, grew 30% to $6.5 billion in the fiscal third quarter, suggesting potential acceleration. If the company signals traction in securing agentic AI workflows, its stock could react positively, though simply beating estimates may not suffice without strong forward guidance.
CrowdStrike Rallies 4% on Google Cloud Deal and AI Agents
CrowdStrike Holdings shares jumped 4% to $227.84 in Monday trading after the company opened its Fal.Con 2026 conference with a series of AI-focused announcements, including making its Falcon platform available on Google Cloud and launching Falcon IQ, a new agent stack powered by NVIDIA's open Nemotron models. The company also expanded its Project QuiltWorks data-sharing coalition to ingest real-time data from twelve outside sources, including rival Zscaler, positioning CrowdStrike as the aggregation layer for AI-era cybersecurity. CrowdStrike's fiscal second-quarter 2027 revenue reached $1.47 billion, up 26% year over year, with Falcon Flex annual recurring revenue topping $2.29 billion, up 101%, and management raised its full-year growth outlook by 630 basis points. The stock is up 86% year to date, trading near the analyst target price of $227.58.
Enterprise Software Stocks Surge on AI-Driven Earnings
Enterprise software and SaaS stocks surged in the afternoon session after quarterly earnings and upbeat commentary signaled that artificial intelligence is driving growth rather than threatening legacy business models. ServiceNow jumped 9.8%, Zscaler 9.9%, SentinelOne 11.8%, Asana 8.1%, and Elastic 7.8%, following stronger-than-expected results from major tech firms. Salesforce's AI-powered Agentforce reached $1.5 billion in annual recurring revenue, and Slackbot surpassed 1 million active users in five months. CrowdStrike CEO George Kurtz attributed momentum to AI expanding the attack surface, while Okta said AI-focused offerings drove about 30% of new bookings and increased contract values by roughly 40%. The rally, highlighted by a 20% surge in Salesforce, reflects confidence that established vendors can capture value from AI deployment.
JFrog Launches Traffic Controller with Zscaler, Cloudflare, Netskope
JFrog Ltd. has introduced the JFrog Traffic Controller, a new solution integrated with Zscaler, Cloudflare, and Netskope to enforce software supply chain security at the network edge, ensuring all package downloads flow through JFrog Artifactory as the single source of truth. The company's 2026 State of the Union report revealed a 451% surge in malicious packages year over year, reaching over 171,000 unique instances, yet only 40% of organizations have detection capabilities. The Traffic Controller reroutes outbound package requests through JFrog Curation, which inspects each package against security, license, and quality policies, blocking malicious ones and serving safe approved versions automatically. Available immediately, the solution supports Zscaler Internet Access, Cloudflare Gateway, and Netskope One SSE, with additional SASE partners expected to follow. JFrog CEO Shlomi Ben Haim emphasized that the goal is to provide a universal control point without disrupting developer workflows, and the company will showcase the solution at swampUP 2026 in New York from September 1-3.
Cloudflare's Workers Platform Drives Growth with 7.4 Million Developers
Cloudflare's Workers developer platform is becoming a key growth engine, with the company reporting over 7.4 million developers on the platform by the end of the second quarter of 2026, adding nearly two million in that quarter alone—more than the 1.5 million added during all of 2025. The platform is gaining traction among enterprise customers, with more including Workers in pool-of-funds contracts; for instance, an APAC technology company signed a $4 million Workers contract after an $8.7 million Application Services deal, and another signed a $6 million contract for AI agent capabilities. Cloudflare says Workers has moved beyond adoption to meaningfully contribute to revenues, driving consumption alongside security and networking products. The rise of AI agents could further boost the platform, with Zacks Consensus Estimates projecting 32.3% and 28.5% year-over-year revenue growth for 2026 and 2027, respectively. However, Cloudflare faces tough competition from Palo Alto Networks, whose SASE segment grew 40% year over year in fiscal Q3 2026, and Zscaler, which ended its fiscal Q3 with over 700 Zero Trust Everywhere enterprises, up from 550. Cloudflare's stock is up 40.7% year-to-date, trading at a forward price-to-sales ratio of 28.87 versus the industry's 3.91, and carries a Zacks Rank #3 (Hold).
Palo Alto Networks Network Security Growth Accelerates on AI Demand
Palo Alto Networks reported its Network Security business had its strongest quarter in several years during the third quarter of fiscal 2026, driven by rising enterprise spending on AI and cloud infrastructure. Next-generation firewall bookings grew nearly 40% year over year, supported by Gen 5 appliances and AI data center buildouts, while software firewall ARR increased 25% year over year. Network Security accounts for about 70% of total revenues, and hardware revenues, about 10% of total, had their best quarter in a decade with a record backlog. Management expects data center expansion and higher traffic volumes to remain key growth drivers for the next several quarters and potentially several years. Competitors CrowdStrike and Zscaler are also benefiting from AI-related cybersecurity demand, with CrowdStrike's AIDR solution seeing ending ARR grow more than 250% sequentially and Zscaler surpassing 700 Zero Trust Everywhere enterprises.
Cybersecurity & Digital Trust › Network Security & SASE ▲Demand
Artificial Intelligence › AI Applications & Copilots ▲Demand
Cybersecurity & Digital Trust › Cloud & Workload Security ▲Demand
Cybersecurity & Digital Trust › Endpoint & Network Security ▲Demand
PANW · Demand · Positive Network Security business had strongest quarter in years, driven by rising enterprise spending on AI and cloud infrastructure, with next-gen firewall bookings up nearly 40%.
0ZC.XETRA · Demand · Positive Zscaler surpassing 700 Zero Trust Everywhere enterprises, benefiting from AI-related cybersecurity demand.
CRWD · Demand · Positive CrowdStrike's AIDR solution seeing ending ARR grow more than 250% sequentially, benefiting from AI-related cybersecurity demand.
ZS · Demand · Positive Zscaler surpassing 700 Zero Trust Everywhere enterprises, benefiting from AI-related cybersecurity demand.
Zscaler and Carahsoft Expand Partnership to Deliver Zero Trust Security to SMB and Mid-Market Customers
Zscaler and Carahsoft Technology announced an expanded partnership to bring the Zscaler Zero Trust Exchange platform to U.S. small and medium-sized businesses and mid-market organizations. The initiative introduces standardized SMB-ready customer offers, simplified consumption with predictable pricing, partner enablement at scale, and go-to-market partner velocity. Zscaler's SVP of Global Partner Ecosystem Anthony Torsiello said the move makes the platform more accessible to a large underserved segment, while Carahsoft President Craig P. Abod highlighted easier procurement, deployment, and management through Carahsoft's reseller ecosystem.
Zscaler Raises CapEx Outlook as AI Security Demand Grows
Zscaler is preparing for higher capital expenditures as rapid adoption of artificial intelligence creates new cybersecurity demands, with management indicating fiscal 2026 CapEx could reach the high-single-digit percentage range of revenues, up from an earlier mid-single-digit forecast, and could increase by another 200 basis points as a percentage of revenues in fiscal 2027. The company has been moving some fiscal 2027 equipment purchases into the fourth quarter of fiscal 2026 to secure current prices amid higher costs for memory, storage and processors. Third-quarter fiscal 2026 revenues increased 25% year over year to $850.4 million, annual recurring revenues rose 25% to $3.53 billion, and its AI Protect solution generated more than $100 million in bookings over the past 12 months. Zscaler generated free cash flow of $136 million in the third quarter and $718.4 million in the first nine months of fiscal 2026, but management lowered its fiscal 2026 free cash flow margin guidance range to 22.8%-23.3% from the earlier forecast of 26.5%-27%. The Zacks Consensus Estimate for fiscal 2026 and 2027 indicates year-over-year revenue growth of 24.6% and 16.9%, respectively, while ZS shares have plunged 16.7% year to date and trade at a forward price-to-sales ratio of 7.77, significantly below the industry's average of 18.85.
CloudSEK Identifies Over 2,500 Organisations Potentially Impacted by AI Supply Chain Exposure
CloudSEK has identified more than 2,500 organisations that may have been potentially affected by a major AI supply chain incident involving LiteLLM in March 2026, with approximately 434,000 automated software-development pipelines linked to the exposure. The potentially affected organisations span critical industries including technology, cybersecurity, banking and financial services, telecommunications, manufacturing, consulting, logistics, and enterprise software, with high-confidence matches associated with major global organisations including NVIDIA, Samsung Electronics, Cisco Systems, Siemens, S&P Global, ServiceNow, Deloitte, Vodafone, X Corp, Zscaler, FedEx, Volkswagen, Thales and London Stock Exchange Group. The incident occurred after cybercriminal group Team PCP compromised LiteLLM, and malicious versions were reportedly available through the Python software repository PyPI for only around 40 minutes, yet CloudSEK's analysis identified approximately 434,000 CI/CD pipelines potentially connected to the exposure. Potentially accessible information included cloud credentials, source-code access, server keys, software-development secrets, AI API keys and other credentials that could give attackers access to critical business systems, and CloudSEK stresses that appearing in the dataset does not automatically mean an organisation was successfully breached but should be investigated urgently. CloudSEK has released a free exposure-checking tool to help organisations determine whether credentials or infrastructure associated with them appear in the identified dataset.
Cybersecurity & Digital Trust › AI Security & Agent Guardrails ▼Supply
Artificial Intelligence › AI Tooling, Data & MLOps ▼Supply
LSEG.LSE · Supply · Negative London Stock Exchange Group is listed among potentially affected organizations, risking exposure of credentials and source code.
SIE.XETRA · Supply · Negative Siemens is named as potentially affected, with risk of credential and source-code exposure from the compromised LiteLLM.
VOD.LSE · Supply · Negative Vodafone is identified as potentially impacted by the AI supply chain incident, with possible exposure of credentials and secrets.
VOW.XETRA · Supply · Negative Volkswagen is listed among potentially impacted organizations, facing potential exposure of credentials and development secrets.
ZS · Supply · Negative Zscaler is named as potentially impacted by the LiteLLM supply chain compromise, with exposure of credentials and secrets.
005930.KO · Supply · Negative Samsung is listed as potentially impacted by the LiteLLM supply chain compromise, with exposure of credentials and source code.
Zscaler Named a Leader in Both 2026 Gartner Magic Quadrant for SASE Platforms and SSE
Zscaler has been recognized as a Leader in both the 2026 Gartner Magic Quadrant for SASE Platforms and the 2026 Gartner Magic Quadrant for Security Service Edge. This marks the fifth consecutive year Zscaler has been named a Leader in the SSE Magic Quadrant and its first year as a Leader in the SASE Platforms Magic Quadrant. The company believes these results underscore its accelerating market momentum and the proven capability of its Zero Trust SASE framework. Zscaler protects 40% of the Forbes Global 2000 and is introducing the ZAgent Framework to bring agentic AI to SASE management.
Zscaler, Shopify, and PTC Shares Jump as Falling Yields Boost Enterprise Software
Shares of Zscaler, Shopify, and PTC rose sharply in afternoon trading as a drop in Treasury yields and concerns over the artificial intelligence investment cycle improved market appetite for enterprise software. Zscaler gained 3.3%, Shopify added 2.8%, and PTC climbed 2.5%, benefiting from a broader rotation out of semiconductor stocks and into software names. The decline in interest rates provided a macro tailwind for long-duration Software-as-a-Service valuations, while portfolio managers reallocated capital away from chipmakers after the top 25 semiconductor and hardware companies reached a combined market capitalization of approximately $22 trillion. Zscaler remains down 31.4% year-to-date and trades 55% below its 52-week high of $336.27 from November 2025.
Zscaler and Schwarz Digits partner for sovereign cloud security platform in Europe
Zscaler has partnered with Schwarz Digits to launch a sovereign cloud-based cybersecurity platform for customers across Europe. The joint offering combines Zscaler's Zero Trust Exchange platform with Schwarz Digits' STACKIT cloud infrastructure hosted in Germany, delivering a sovereign Zero Trust Secure Access Service Edge platform designed to help organizations defend against AI-driven cyber threats while meeting Europe's digital sovereignty and regulatory requirements. Christian Müller, CEO of Schwarz Digits, said the partnership takes network security to a new level by evolving existing security architectures and focusing on high-performance identity verification, providing customers with stronger protection against cyberattacks.
Cybersecurity & Digital Trust › Workforce & Customer IAM (SSO/MFA) ▲Demand
0ZC.XETRA · Demand · Positive Zscaler partners with Schwarz Digits to launch a sovereign cloud security platform, expanding its customer reach in Europe.
ZS · Demand · Positive Zscaler partners with Schwarz Digits to launch a sovereign cloud security platform, expanding its customer reach in Europe.
Schwarz Digits · Demand · Positive Schwarz Digits partners with Zscaler to offer a sovereign cloud security platform, enhancing its cybersecurity portfolio.
Jim Cramer Names Palo Alto Networks and CrowdStrike as Top Cybersecurity Stocks for the AI Era
Jim Cramer told his followers that there will always be another DeepSeek and named Palo Alto Networks and CrowdStrike as the cybersecurity plays for a world where every enterprise is scrambling to secure frontier AI models and compromised agents. Palo Alto Networks shares are up 92.18% year-to-date, CrowdStrike is up 73.87% year-to-date, and Fortinet leads the group with a 102.47% year-to-date gain. Cramer also highlighted Zscaler, which is down 34.9% year-to-date despite nine straight EPS beats and an analyst target of $192.58, and Cloudflare, which is up 38.2% year-to-date as it pivots to an agentic AI-first company. The five stocks are positioned to benefit from enterprise budget shifts toward AI security infrastructure.
Cybersecurity & Digital Trust › AI Security & Agent Guardrails ▲Demand
Cybersecurity & Digital Trust › Endpoint & Network Security ▲Demand
Cybersecurity & Digital Trust › Cloud & Workload Security ▲Demand
Cybersecurity & Digital Trust › Security Operations (SIEM/SOAR/XDR/MDR) ▲Demand
CRWD · Demand · Positive Cramer names CrowdStrike as a top cybersecurity play for AI era, benefiting from enterprise budget shifts toward AI security.
PANW · Demand · Positive Cramer names Palo Alto Networks as a top cybersecurity stock for AI era, benefiting from enterprise AI security spending.
FTNT · Demand · Positive Fortinet leads cybersecurity group with 102.47% YTD gain, positioned to benefit from AI security infrastructure spending.
NET · Demand · Positive Cloudflare pivots to agentic AI-first company, benefiting from AI security demand.
ZS · Demand · Neutral Zscaler is down 34.9% YTD despite EPS beats and analyst target, but still positioned to benefit from AI security shift.
0ZC.XETRA · Demand · Neutral Mentioned as a cybersecurity stock that could benefit from AI security spending, but noted as down 34.9% YTD despite EPS beats, with no specific catalyst.
Zscaler shares jump after cyber threat warning puts security stocks back in focus
Shares of Zscaler moved sharply higher after U.S. and international security agencies issued a joint warning about Russian state-sponsored cyber threats against critical infrastructure. The cloud security stock has returned 9.5% over the past month and 15.6% over three months, though it remains down 35.7% year to date and has posted a one-year total shareholder return decline of 51.3%. A widely followed narrative on Simply Wall St pegs Zscaler's fair value at $192.58, implying the stock is 26.4% undervalued relative to its last close of $141.82, while its price-to-sales ratio of 7.2x sits above the U.S. software industry average of 3.5x but below peer levels around 10x and a fair ratio of 8.1x.
StockStory highlights three growth stocks with significant upside potential. Zscaler, with one-year revenue growth of 24.6%, benefits from steady annual recurring revenue trends and a robust free cash flow margin of 28.1%, trading at 6.3 times forward price-to-sales. DoorDash, posting 31% revenue growth, sees orders increasing 22.9% annually and expects 25.6% revenue growth, with shares at 21.5 times forward EV-to-EBITDA. Celsius, with 123% revenue growth, has a 50.4% gross margin and 215% annual earnings per share growth, trading at 18.3 times forward price-to-earnings.
Faruqi & Faruqi Investigates Zscaler Over Guidance and Sales Leadership Disclosures
Faruqi & Faruqi, LLP is investigating potential claims against Zscaler on behalf of investors who suffered significant losses. The investigation concerns whether Zscaler misled investors regarding its growth outlook, sales execution, customer expansion trends, and the impact of sales leadership changes before issuing weaker-than-expected guidance on May 27, 2026. On that day, Zscaler's stock fell $58.19, or 31.52%, to close at $126.41 per share, marking its steepest single-day decline since going public. Investors who purchased Zscaler stock or options and suffered losses, particularly following the May 27 decline, may have legal rights and are encouraged to contact Faruqi & Faruqi partner Josh Wilson directly.
Zscaler Lands Multi-Year Cybersecurity Deal With Aston Martin Aramco F1 Team
Zscaler has entered a multi-year global cybersecurity partnership with the Aston Martin Aramco Formula One Team. The agreement focuses on securing high-volume, real-time data flows that support car performance, race strategy, and broader team operations. The collaboration positions Zscaler's cloud security platform at the core of a high-profile, data-intensive sports environment. The deal puts Zscaler's Zero Trust Exchange in a highly demanding, real-time environment where data security and low latency are business critical, serving as a proof point for handling complex workloads. Visible branding on the AMR26 car and team assets could support Zscaler's positioning with enterprise buyers.
Zscaler's Average Brokerage Recommendation Is 1.44, but Zacks Rank Says Hold
Zscaler currently has an average brokerage recommendation of 1.44, based on 45 analyst ratings, with 34 Strong Buys and two Buys. However, the Zacks Rank assigns the stock a Hold rating, citing an unchanged consensus earnings estimate of $4.13 for the current year. Brokerage recommendations often carry a positive bias due to firms' vested interests, while the Zacks Rank focuses on earnings estimate revisions, which research shows correlate with near-term price movements. Investors are advised to be cautious about relying solely on the buy-equivalent ABR.
Cybersecurity stocks reported satisfactory first-quarter results, with aggregate revenues beating analyst consensus estimates by 1.6% and next-quarter revenue guidance in line. Okta posted revenue of $765 million, up 11.2% year-over-year and exceeding expectations by 1.7%, while Palo Alto Networks delivered the fastest revenue growth among peers at 31.1% to $3.00 billion, beating estimates by 2%. SentinelOne was the weakest performer, with revenue of $276.7 million, up 20.8% year-over-year but in line with estimates, and its billings and guidance missed expectations. Zscaler reported revenue of $850.5 million, up 25.4% year-over-year and topping estimates by 1.8%, and Varonis Systems posted revenue of $173.1 million, up 26.9% year-over-year and beating estimates by 4.6%, the biggest beat among the group. Since reporting, cybersecurity stocks have averaged a 16.7% share price increase.
KeyBanc Lowers its Price Target on Zscaler to $176
KeyBanc lowered its price target on Zscaler to $176 from $190 while maintaining an Overweight rating. The firm's chief investment officer survey for the first half of 2026 indicated a widening gap between IT budget winners and losers, with AI and AI-readiness spending rising sharply in priority. KeyBanc recommended investors stick with security, data, infrastructure, and monitoring names. Earlier in June, Guggenheim upgraded Zscaler to Buy from Neutral with a $214 price target, calling it a category leader in a nascent hyper-growth market. Last month, Wells Fargo lowered its price target on Zscaler to $180 from $210 and kept an Overweight rating, noting that resetting next year's top-line numbers was needed but that free cash flow headwinds could keep investors sidelined.
Cyber budgets to grow in line with IT in 2026, AI spend takes priority: Jefferies survey
Jefferies' survey of 40 chief information officers indicates cybersecurity budgets are set to grow 6.2% year-over-year in 2026, in line with overall IT and software spending growth, while artificial intelligence and machine learning remain the top spending priority. The survey shows 56% of respondents expect to increase spending on Palo Alto Networks, 44% on CrowdStrike, and 43% on Zscaler, though these figures are down from December 2025 levels. Within cybersecurity, threat intelligence, cloud security, and identity and access management are seen as the biggest beneficiaries of generative AI adoption, while hardware is expected to benefit least. The analysts view the rising priority of AI tools as a positive long-term catalyst for cybersecurity, but expect material budget inflection to be gradual and only broadly tangible from calendar year 2027 onward.
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