Artificial Intelligence (AI) is a revolutionary technology for businesses, but it also poses serious risks. As organizations rapidly deploy artificial intelligence agents to make employees more productive, they may inadvertently expose sensitive data and mission-critical applications to hackers.
Z scalerof (NASDAQ: ZS) Zero trust cybersecurity architecture is designed for this moment. It was originally designed to protect corporate networks from unauthorized personnel. Now, it is also deployed to protect the activities of artificial intelligence agents. As AI adoption increases, this could be a huge financial opportunity for Zscaler.
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Zscaler stock still trades 60% below its all-time high from 2021, when the frenzy in the tech market pushed its valuation to unsustainable levels. But most analysts track wall street journal Believing the stock is a buy now, their consensus price target suggests significant potential upside.
As the name suggests, a zero-trust architecture treats every connection to a given enterprise network as hostile, thereby plugging any potential vulnerabilities. It starts with the identity layer. Zscaler’s Zero Trust Exchange analyzes each employee’s login credentials as well as the device and location they are using to determine if it is indeed them trying to access the company network, or if they are an imposter.
This is especially important for remote workers who cannot be physically supervised when accessing sensitive applications, but it doesn’t stop there. Zero trust exchange connects employees to only the applications they need to do their jobs. Therefore, even if hackers break through the identity layer, they cannot move laterally within the network, which limits their ability to cause damage.
Then there’s the Zero Trust branch, which ties together Zscaler’s “Zero Trust Everywhere” philosophy. It runs every device, warehouse, factory, and retail location through a zero-trust exchange, isolating it from a cybersecurity perspective. Therefore, even if one of the assets is compromised, it will not affect the rest of the organization. This is key in the age of artificial intelligence, as attackers continue to detect vulnerabilities at machine speed.
Now, Zscaler is launching zero-trust exchange for AI agents. Organizations can now assign them restricted access to only the specific applications or data sets required for their mission, rather than allowing them to roam freely within the corporate network. Again, this means that even if a hacker compromises a proxy, the impact will be limited.
Zscaler ended the first half of fiscal 2026 on January 31. Revenue for the quarter hit a record $1.6 billion, a year-over-year increase of 25.7%. Following this result, management slightly raised its full-year revenue forecast from $3.3 billion to $3.32 billion (at the high end of their respective ranges), a sign of the company’s growth momentum.
Zscaler has about 9,400 customers in total, but management said that as of January 31, 550 of those customers had adopted the Zero Trust Everywhere philosophy. Compared with the same period last year, the increase was as high as 323%. This shows that customers are gradually purchasing more of the Zscaler product suite, which is very positive.
Zscaler is also making progress on profitability thanks to prudent expense management. The company still lost $45.9 million in the first half of fiscal 2026 on a generally accepted accounting principles (GAAP) basis, but after excluding one-time and non-cash charges, it generated an adjusted loss of $45.9 million. profit $328.1 million. A year-on-year increase of 30.5%.
wall street journal We track 50 analysts covering Zscaler stock, and 37 of them rate it a Buy. Another six fall into the Overweight (Bullish) camp, while the remaining seven recommend Hold. Not a single analyst in this group recommends selling.
The consensus analyst price target is $237.30, which suggests Zscaler shares could rise 57% over the next 12 months or so. However, Wall Street’s top target of $335 implies a potential upside of 122%.
The consensus target is likely realistic as Zscaler is currently significantly cheaper than its peers. Its stock trades at a price-to-sales (P/S) ratio of just 7.9, compared with 10.7 for other companies. Palo Alto Networks 20.9 for mass strike.
If Zscaler shares hit $237.30, its price-to-earnings ratio would rise to 12.4, surpassing Palo Alto but still much cheaper than CrowdStrike. This may be achievable, as the company’s revenue is growing much faster than its peers. Its second-quarter revenue grew 26%, outpacing Palo Alto’s 15% growth and CrowdStrike’s 22% growth in recent quarters.
All else being equal, a company that grows faster than its competitors will typically command a premium valuation rather than a discount valuation, so I think there’s definitely room for upside here. Therefore, I think Wall Street is right to be bullish on Zscaler’s prospects.
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Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool holds positions and recommends CrowdStrike and Zscaler. The Motley Fool recommends Palo Alto Networks. The Motley Fool has a disclosure policy.
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