Zscaler stands to benefit as AI's growth raises security needs, a point Elon Musk and Dario Amodei just emphasized, making large pullbacks in the sector a buying opportunity. Q2 revenue was $898M, up 25% year over year, ARR reached $3.77B, AI security bookings rose 50% sequentially, the Z-Flex program reached $770M in quarterly contract value, and non-GAAP operating margin hit a record 24.3%. x.com 

Zscaler holds a near-monopoly in public-sector zero trust and is becoming the default way to secure enterprise AI traffic. Early-July procurement updates show it renewed and expanded zero-trust contracts with the Department of Defense and core federal agencies, backed by top-tier FedRAMP High certification. As AI agents and model queries create data-leak risk, adoption of its AI data and zero-trust gateway products surged 85% sequentially, and LLM providers co-recommend it. x.com 

Zscaler's management is undermining trust in the stock even after a quarter that beat on revenue, EPS, billings and guidance. On the call the CFO offered a 16-17% FY27 guide before FY26 ended and contradicted himself, leaving investors scared. FCF margin guidance fell on higher data center capex, with 2027 capex guided another 200bp of revenue higher. Mythos looks like the real value-add, making cybersecurity names look like resale wrappers around AI LLMs. Very tough for long-term holders. x.com  … Show more

Zscaler's 31% drop is a mispricing, because AI agents multiply endpoints and attack surface, raising demand for the zero-trust security that Zscaler leads. The selloff came the same day Robinhood opened trading to AI agents, so the market is selling a picks-and-shovels name of the AI era while celebrating that era, exactly the setup for +200% trades. x.com 

Zscaler's enforcement layer looks undervalued, since AI commoditizes tools that produce answers but strengthens tools that enforce decisions. As a cloud proxy every user session must pass through, replacing it means re-architecting traffic, not swapping vendors. It trades at 8.6 times EV/sales on 25% growth, 47% below its 52-week high, with $1.11B of free cash flow and net cash. The case fails if Palo Alto, Netskope or Cisco make enforcement a checkbox in a platform bundle. x.com 

Zscaler's after-hours rally is paying for profit, not growth, and the growth outlook remains weak. It beat every line, but reaffirmed fiscal 2027 ARR growth of 16.6% to 17.4%, the framework that sank the stock 31% in May, implying net new ARR down 13% to 17%; excluding Red Canary, organic net new ARR is roughly flat. Q4 free cash flow margin fell to 7% from 24% as capex nearly tripled, and the flat 23.0-23.5% FY27 margin guide rests on a memory-price assumption. x.com 

Rubrik's high switching costs and emerging AI-security demand underpin growth that looks attractively valued. At 12.9x forward EV/sales, it trades below the cybersecurity peer median relative to expected revenue growth. Subscription ARR grew 32.6% YoY and net dollar retention reached 119%. Agentic AI security adoption remains early; non-GAAP operating margin hit 7.8%, though GAAP net income remains negative partly due to stock-based compensation. x.com 

Zscaler is a no-brainer at this price, and selling it on a small Q4 revenue guidance miss makes no sense. Q3 beat on revenue ($850M vs $836M), EPS, operating income and ARR ($3.53B), and Q4 EPS guidance of $1.09 topped the $1.04 estimate, while revenue guidance was $877M versus $879M, per @StockSavvyShay. x.com  x.com 

Zscaler should sell off on its guide for 9.5% organic ARR growth in fiscal 2027. That makes it a slow-moving software company with excellent dollar-based net retention but a withering growth engine, not an AI winner. x.com 

Zscaler looks like the better cybersecurity buy for the next three years because its valuation has diverged sharply from CrowdStrike's. Zscaler trades at 5.7x next-twelve-month revenue with 17-18% expected annual growth, versus CrowdStrike at 31.1x revenue and 150x earnings with 21-22% growth, probably the biggest gap ever between them. A 25% CAGR over 3-5 years is hard to model for CrowdStrike at that price. Zscaler has been beaten up for good reasons. x.com  x.com