Zscaler Forges AI Alliances as Shares Rebound Ahead of Earnings

Zscaler shares jump 7.55% after AI deals with OpenAI and Anthropic, but year-to-date losses remain near 34% as analysts see upside.

The cybersecurity firm has been on a rollercoaster ride this year, but a pair of strategic partnerships with the artificial intelligence sector’s biggest names is giving investors fresh reason to cheer. Zscaler’s stock surged 7.55 percent to 119.70 euros on the day it announced collaborations with both OpenAI and Anthropic, adding to a recent rally that saw shares climb nearly 11 percent in a single session.

The stock now trades at 123.24 euros, a meaningful bounce from its April low near 100 euros. Still, the year-to-date picture remains grim — the shares have shed roughly 34 percent of their value since January, a figure that echoes the 36 percent decline noted in other recent trading sessions.

AI Partnerships Target Next-Gen Threat Detection

Zscaler is joining Anthropic’s “Project Glasswing” coalition, gaining access to the Claude Mythos Preview model. This AI has already identified thousands of critical vulnerabilities across operating systems, and Zscaler plans to embed the technology directly into its zero-trust platform. Separately, the company is participating in OpenAI’s “Trusted Access for Cyber” program, which leverages GPT-5.4-Cyber to spot security gaps earlier and accelerate patch deployment.

The logic is straightforward: AI models can uncover weaknesses far faster than human analysts, sometimes generating exploits in hours rather than weeks. Zscaler intends to harness that speed to harden its own software, with a particular focus on protecting AI agents and automated workflows.

Wall Street Still Sees Upside Despite Recent Pain

Analyst sentiment remains broadly constructive, even after the stock’s sharp correction. Of the 35 analysts covering Zscaler, the majority still rate the shares a buy. The average price target stands at roughly $265, implying substantial upside from current levels.

But the bull case is not unanimous. Morgan Stanley recently trimmed its target to $155, citing the risk of slower growth in core product lines. At the other end of the spectrum, some analysts have set targets as high as $385. The wide dispersion reflects uncertainty about how quickly the company can reignite momentum.

Government Contracts and Revenue Targets

A key pillar of Zscaler’s growth story is its public-sector business. The company recently secured a $122.2 million framework agreement with U.S. government agencies for software and services, providing a stable revenue stream in that segment.

For fiscal 2026, management is targeting $3.42 billion in revenue, representing nearly 28 percent growth year-over-year. Achieving that figure will be critical to justifying the stock’s valuation, especially as competition intensifies with rivals like Cloudflare and Netskope in the increasingly crowded zero-trust security market.

What Comes Next

All eyes are now on May, when Zscaler is scheduled to report quarterly results. The upcoming earnings release will test whether the company can convince investors that its growth narrative remains intact. Between the AI partnerships, the government contract, and the ambitious revenue forecast, the pieces are in place — but execution will determine whether the stock can sustain its recovery.