Key Highlights
- Zscaler (ZS) advanced up to 6.99% on May 1, propelled by robust earnings reports and increased guidance from SaaS companies such as Atlassian and Twilio.
- Citizens adjusted its price target on ZS downward from $290 to $210 while maintaining an Outperform rating.
- ZS was changing hands at $139.58, representing a 36.7% decline year-to-date and trading 58.5% beneath its 52-week peak of $336.27.
- A KeyBanc CIO survey identified increasing cybersecurity budgets connected to AI implementation as a favorable driver for security platforms.
- The equity has experienced 18 sessions with movements exceeding 5% during the past year, demonstrating continued volatility.
Zscaler (ZS) advanced as much as 6.99% on May 1, benefiting from a surge of optimism that moved through the software industry following strong quarterly reports from several major companies.
The equity was changing hands at $139.58 entering the trading day — a valuation that represents a 58.5% discount from its 52-week peak of $336.27, reached in November 2025.
The primary driver wasn’t directly related to Zscaler. Atlassian increased its annual guidance, propelling its shares upward and creating momentum for companies like Salesforce and ServiceNow.
Twilio contributed to the optimistic atmosphere following a first-quarter revenue report that exceeded projections and an upgraded outlook, with its chief executive highlighting AI as a significant growth factor.
This type of industry-wide momentum frequently elevates the entire sector, and ZS benefited from the trend.
Citizens Reduces Target While Maintaining Positive Outlook
Not all developments on May 1 favored Zscaler. Citizens decreased its price objective on the equity to $210 from $290.
The reduction acknowledged worries that advanced AI capabilities could amplify cybersecurity risks and necessitate a reassessment of how security company valuations are determined throughout the industry.
Nevertheless, Citizens maintained its Outperform rating — indicating the firm continues to anticipate appreciation from present price levels, even as the valuation landscape becomes more complex.
Demand for zero-trust and SASE platforms, which form the foundation of Zscaler’s operations, continues to show strength according to the firm.
AI and Cyber Budgets Under Spotlight
Approximately ten days prior to the May 1 advance, ZS appreciated 4.1% following a KeyBanc survey of CIOs that revealed expanding cybersecurity budgets associated with AI deployment.
The survey spotlighted Anthropic’s Mythos AI model as an element expected to fuel heightened enterprise investment in security throughout the coming year.
The rationale is clear: expanded AI usage creates larger attack surfaces, and organizations are projected to allocate more resources toward protection.
This favorable trend has helped counterbalance some of the challenges Zscaler has encountered in 2026.
ZS has ranked among the more severely impacted names in the cybersecurity sector this year, declining 36.7% since January 1.
The equity has registered 18 sessions with movements surpassing 5% over the past year, illustrating how responsive it has been to both industry developments and wider market fluctuations.
An investor who allocated $1,000 into Zscaler five years ago would currently hold approximately $772.93.
The equity’s average daily trading volume reaches just above 3 million, and its present market capitalization stands at $21.01 billion.
Citizens’ updated price objective of $210 continues to suggest substantial appreciation potential from the $139.58 level where ZS was trading on May 1.
