What Happened?
Shares of cloud security platform Zscaler (NASDAQ: ZS) jumped 8.5% in the afternoon session after B.Riley analyst Erik Suppiger upgraded the cybersecurity stock from Neutral to Buy.
Suppiger argued that demand for Zscaler's "secure access" products, which protect employees connecting to company apps from anywhere, remains healthy, and that the growing rollout of AI tools inside large companies will require even more of this kind of protection. He also flagged valuation: Zscaler traded well below its long-run average since going public, suggesting the stock appeared cheap relative to its own history.
Adding fuel, KeyBanc lifted its price target to $190 from $160, pointing to stronger-than-expected channel checks with Zscaler's reseller partners.
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What Is The Market Telling Us
Zscaler’s shares are very volatile and have had 20 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 3 days ago when the stock gained 4.5% as President Trump's state visit to Beijing lifted market sentiment across tech, with the S&P hitting a record high above 7,500.
While the Trump-Xi summit produced fewer concrete deals than investors had hoped for, the general mood around US-China trade relations shifted from confrontational to cautiously constructive and for a sector as globally exposed as software, that reduction in uncertainty was enough to drive buyers back in.
Adding to the positive sentiment, Figma posted 46% revenue growth with early AI monetisation showing genuine traction, and ServiceNow announced a multi-year AI partnership with Experian. Each print reinforced the same thesis: that enterprise software companies are successfully embedding AI into their products and charging for it, rather than being disrupted by it a concern that had weighed heavily on the sector earlier in the year.
Zscaler is down 20.7% since the beginning of the year, and at $174.86 per share, it is trading 48% below its 52-week high of $336.27 from November 2025. Despite the year-to-date decline, investors who bought $1,000 worth of Zscaler’s shares 5 years ago would now be looking at an investment worth $1,050.
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