NEW YORK, May 1, 2026, 17:02 EDT
Zscaler Inc. jumped roughly 7% Friday, shaking off a new price-target cut from Wall Street. A broader rally in software names pulled the cloud-security stock higher into the session’s end. Shares last changed hands at $139.81, up $9.14, and earlier touched $140.95.
Why does it matter? Investors want to know if software and cybersecurity names—many already battered—have finally bottomed out, or if corporate belt-tightening will keep squeezing growth. Zscaler (ZS) happens to be right in the thick of it: AI-driven security is gaining traction, yet major deals are still running into drawn-out approval cycles at large companies.
Citizens JMP’s Trevor J. Walsh trimmed his price target on Zscaler to $210 from $290 on Friday but left his Buy rating unchanged, TipRanks’ analyst tracker shows. The new target lands about 50% above Friday’s latest price, underscoring that Walsh’s move reflects valuation caution rather than a full step back from the name.
Software names caught a bid. Atlassian surged 29.6% after lifting its full-year outlook, pushing tech to the top of the S&P 500’s sector leaderboard on Friday, according to Reuters. “Cherry on top,” Carson Group’s Ryan Detrick said of the session, as earnings capped off a strong week. Reuters
Zscaler rolled out new product updates this week. In an April 30 GovCloud release, Jose Arvelo Negron, who works as a sales engineering manager at Zscaler, said the company has broadened generative AI prompt controls, introduced AI-driven document classification for roughly 200 additional document types, and made reporting sharper for Zscaler Digital Experience—the company’s platform for monitoring user and app performance.
This is a key point for the public-sector side. GovCloud covers cloud infrastructure tailored for government-level security and compliance. Data loss prevention—DLP for short—refers to technology aimed at catching and stopping sensitive information before it slips out of authorized systems.
Zscaler’s cloud security screens identity, device context, and policy before letting users access apps or data. Reuters says its Zero Trust Exchange shields customers from cyberattacks and data leaks by linking users, devices, and applications securely—no matter where they are. The “zero trust” model doesn’t automatically trust any user or device inside a corporate network. Reuters
Bulls found a reason to stay interested after the company’s latest earnings. Zscaler reported fiscal Q2 revenue up 26% to $815.8 million. Annual recurring revenue—subscription sales likely to recur annually—climbed 25% to $3.36 billion. “Profitability had reached an all-time high,” said Chief Financial Officer Kevin Rubin. Zscaler, Inc.
The risk has hardly disappeared. In its most recent quarterly report, Zscaler noted that customers remain cautious with big-ticket deals, dragging out approval times amid economic uncertainty. The company also flagged that tougher macro or geopolitical factors could weigh on sales, stretch sales cycles, and put pressure on prices.
Competition remains a focus. Back in April, BTIG cut its rating on Zscaler to Neutral from Buy after its checks flagged stiffer rivalry from Cloudflare and Netskope. The firm also noted firewall vendors gaining traction with their own secure-access offerings among current clients.
Friday’s action didn’t really signal a fundamental shift for the company—it felt more like software stocks rallying and Zscaler catching a break after weeks of rough headlines. What’s next? Zscaler still has to prove it can actually convert AI-security buzz and those public-sector updates into stronger organic growth, not only a firmer footing for subscription software stocks.
