This Growth Stock Is Down Over 40% in 2026. Will Investors Regret Not Buying the Dip?

Zscaler (NASDAQ: ZS) is 1 of the world's starring cybersecurity companies. Its zero-trust architecture was designed to support businesses from the astir superior cyber threats, including those powered by precocious technologies similar artificial quality (AI).

The institution released its operating results for its fiscal 2026 3rd 4th (ended April 30) aft the marketplace closed connected Tuesday, May 26, and contempt a comparatively beardown report, its banal plummeted by 31% the adjacent day. The institution announced that 2 elder members of its income section had left, truthful absorption subsequently issued precise blimpish gross guidance for fiscal 2027.

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Zscaler banal is present down 42% successful 2026, but could this beryllium a semipermanent buying accidental for investors?

Zero-trust information was built for the AI gyration

A zero-trust cybersecurity architecture treats each attempted transportation to a firm web arsenic hostile, meaning that cipher receives automatic access. Zscaler's Zero Trust Exchange verifies each idiosyncratic not lone by their login credentials, but besides by analyzing the instrumentality they are utilizing and their location. This increases the likelihood of stopping an imposter.

But the Zero Trust Exchange goes adjacent further. It lone connects employees to the circumstantial applications they request to implicit their jobs, truthful adjacent if a malicious histrion does bypass the individuality information layer, they won't person unrestricted entree to the full firm network. In essence, this minimizes the harm from a palmy breach.

In 2024, Zscaler expanded its absorption to see "branches," which tin beryllium thing from a warehouse to a mill to a retail store. This culminated successful a merchandise called Zero Trust Branch, which isolates those assets from the remainder of the firm network, truthful adjacent if 1 of them is breached, the hacker can't compromise the remainder of the organization.

Zscaler is present extending the Zero Trust Exchange to see AI agents, allowing enterprises to take which circumstantial applications oregon information files agents tin entree successful bid to implicit tasks. This eliminates a hacker's quality to summation entree to each of an organization's invaluable assets by hijacking a azygous agent.

These caller products necktie Zscaler's "Zero Trust Everywhere" doctrine together. Hackers are progressively utilizing technologies similar AI to motorboat blase attacks astatine instrumentality speed, meaning they tin uncover vulnerabilities faster than ever before. As a result, a zero-trust architecture astatine the individuality and exertion layers is nary longer capable -- it has to beryllium the modular crossed the full organization.