Zscaler (ZS) Upgraded to Outperform Amid AI and Zero Trust Growth

1 week ago 7

Sheryar Siddiq

Fri, January 2, 2026 astatine 8:10 AM CST 2 min read

Zscaler Inc. (NASDAQ:ZS) ranks among the best AI stocks to bargain according to analysts. On December 16, Mizuho upgraded Zscaler Inc. (NASDAQ:ZS) to Outperform, noting valuation enactment contempt ongoing concerns astir near-term maturation prospects. According to expert Gregg Moskowitz, Zscaler Inc. (NASDAQ:ZS) shares “have been precise anemic since reporting a precise coagulated F1Q,” with the alteration attributed to “F2Q nett caller ARR guidance somewhat little than prior” and the deficiency of “a circumstantial publication from the caller Red Canary acquisition.”

Despite important top-line growth, Zscaler’s gross margins were nether unit owed to the accelerated adoption of newer products with little margins. This presumption demanded higher operating expenses arsenic the institution sought marketplace stock successful high-growth areas specified arsenic AI information and expanding Zero Trust systems.

While the steadfast keeps pushing for “more transparency from absorption connected ZS’s integrated maturation this year,” Mizuho is convinced that the institution is “very well-positioned wrong SASE/Zero Trust.” The latest selloff, it believes, importantly reimburses investors for these risks.

Zscaler Inc. (NASDAQ:ZS) is simply a cloud-based information institution that provides cybersecurity solutions by protecting idiosyncratic entree to applications and data, careless of location. It replaces accepted hardware-based security, specified arsenic VPNs and firewalls, with its cloud-native Zero Trust Exchange platform, which secures net entree and backstage applications.

While we admit the imaginable of ZS arsenic an investment, we judge definite AI stocks connection greater upside imaginable and transportation little downside risk. If you're looking for an highly undervalued AI banal that besides stands to payment importantly from Trump-era tariffs and the onshoring trend, spot our escaped study connected the best short-term AI stock.

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Disclosure: None. This nonfiction is primitively published at Insider Monkey.