Red Canary Acquisition, AI Innovations Propel Zscaler's Growth Story: Analyst
On June 3, Cikos attended Zscaler's annual Zenith event, the company's flagship gathering for customers and partners. In an analyst note, he said that the company unveiled several new capabilities, primarily focused on AI and the expansion of its Zero Trust Everywhere initiative.
These enhancements aim to bolster data security and thwart cyberattacks, directly addressing critical challenges businesses face when adopting AI, such as protecting proprietary information and ensuring regulatory compliance.Cikos stated that he sees Zenith as Zscaler's initial presentation of management's expansive vision for a reimagined Agentic SOC (Security Operations Center) powered by AI innovations supporting their Data Fabric for Security.
Concurrently, the acquisition of Red Canary is expected to accelerate this vision by adding domain experts capable of engaging with customer SOC teams, a slightly different client persona, the analyst noted.
Additionally, the analyst pointed out that Red Canary is anticipated to empower Zscaler's partners to serve clients better while advancing the Threat Management vision by more effectively utilizing security signals for investigations.
The analyst believes that Zscaler is capable of maintaining its high level of execution as new sales hires increase their productivity and attrition rates decline.
Cikos mentioned that in the third quarter of FY25, Zero Trust Everywhere customers grew over 60% sequentially to more than 210, targeting over 390 by the end of FY26.
The company sees a 6x up/cross-sell opportunity in existing customers, and Cikos views newer products like Branch and AI Analytics as underappreciated.
Cikos foresees sustained ~20% growth, with operating margins eventually surpassing 30% in the long term.
Price Action: ZS shares are trading higher by 1.05% to $298.19 at last check Wednesday.
Read Next:Photo by Sundry Photography via Shutterstock
Date
Firm
Action
From
To
Mar 2022
Daiwa Capital
Upgrades
Underperform
Buy
Feb 2022
BMO Capital
Maintains
Outperform
Feb 2022
Deutsche Bank
Maintains
Buy
View More Analyst Ratings for ZS
View the Latest Analyst Ratings
Up Next: Transform your trading with Benzinga Edge's one-of-a-kind market trade ideas and tools. Click now to access unique insights that can set you ahead in today's competitive market.
Get the latest stock analysis from Benzinga?
This article Red Canary Acquisition, AI Innovations Propel Zscaler's Growth Story: Analyst originally appeared on Benzinga.com
© 2025 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
15 minutes ago
- Yahoo
Evercore Boosts Dell PT to $160, Citing Strong AI Server Demand
Dell Technologies Inc. (NYSE:DELL) is one of the On August 15, Evercore ISI analyst Amit Daryanani raised the price target on the stock to $160.00 (from $150.00) while maintaining an Outperform rating. According to the firm's supply chain checks, there is potential upside to Dell's artificial intelligence server momentum through fiscal year 2026 and probably beyond. The company's guidance also points to major gains in Dell's AI server revenues. The firm further highlighted how demand momentum remains strong with multiple Tier-2 cloud players driving upside. Dell's key customers include xAI and Coreweave. The company is also ramping up capacity with Oracle as well. 'DELL's formal guide for AI server revenues stands at $15B+ for the year and DELL expects to ship ~$7B of AI servers in July-qtr. Our checks suggest that momentum remains fairly strong with multiple Tier-2 cloud players driving demand upside (DELL's key customers are xAI and Coreweave), and DELL is incrementally ramping up capacity with Oracle as well." Image by drobotdean on Freepik "We think conservatively DELL could end-up seeing AI server revenues in the $17-20B (implying $4.1B-$5.6B quarterly rev run-rate in H2) range for the year vs. current expectation of $15B+. The upside is coming from incremental allocation at key neo-cloud partners coupled with new customer ramps. There is an element of upside being driven by improved GB200 rack supply that is driving better availability for high-end NVL72 racks.' Dell Technologies Inc. (NYSE:DELL) provides IT solutions, including servers, storage, networking, and personal computing devices, to businesses and consumers worldwide. While we acknowledge the potential of DELL as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: and Disclosure: None. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Bloomberg
17 minutes ago
- Bloomberg
Private Credit Sees AI Opportunity After Meta's $29B Deal
Bloomberg Technology TV Shows The huge financing needs for developing artificial intelligence are attracting private credit firms, including some that competed for months to give Meta $29 billion in funding for its data center expansion. Bloomberg's Laura Benitez discusses the situation with Caroline Hyde on 'Bloomberg Tech.' (Source: Bloomberg)
Yahoo
21 minutes ago
- Yahoo
OpenAI chairman compares AI to the dot-com boom: There's lots of 'snake oil' but some 'real value being created'
OpenAI chairman Bret Taylor compared the AI boom to its dot-com predecessor, saying that there was lots of "snake oil." There's also "very real value being created," Taylor told the "ACQ2" podcast. Taylor said that "dot-com" often brings to mind failures like and not the success stories, like Google. Within the AI boom — or bubble, as Sam Altman called it at a recent dinner — there will be winners and losers. Some will likely soar like Amazon did out of the dot-com days; others may flounder like In the late 1990s, the stock market reached new heights, propelled by the rise of digital-first companies. The dot-com bubble eventually burst, sending companies like Webvan and into bankruptcy. That era also spawned some of the tech mammoths we still use today, like Amazon and eBay. OpenAI chairman Bret Taylor thinks that era and the AI boom have a lot in common. On the "ACQ2" podcast, he said that the dot-com boom is often remembered only for the companies left in the rubble after the bubble burst. "If you say dot-com, people come back with failures," Taylor said. "If you look at the S&P 500 now and you look at the amount of value from companies created in that, one could argue that actually almost all of the exuberance and hype was totally warranted." 25 years later, some of the "magnificent seven" tech stocks can be traced back to that time period. Amazon went public in 1997 and weathered the dot-com bust; Google was founded during the boom, but didn't go public until after. Some mark Microsoft's 2001 antitrust ruling as the top of the bubble. "It, in fact, did change commerce in fundamental ways," Taylor said. "It did change the financial system in fundamental ways. It changed everything." AI has been buoying the market in a similar way. VCs are pouring billions into AI startups, and Big Tech is investing tens of billions into AI infrastructure, talent, and related capex. In July, Nvidia became the first company to hit a $4 trillion market cap on the back of AI companies' demand for its GPUs. Morgan Stanley recently predicted that AI productivity gains could lead the S&P 500 to gain up to $16 trillion. The market fervor has led some skeptics to call AI a bubble — and compare it to the dot-com era before it. Tech guru Erik Gordon told BI that "more investors will suffer than suffered in the dot-com crash, and their suffering will be more painful." Altman himself compared AI to a bubble at a recent dinner attended by reporters. "When bubbles happen, smart people get overexcited about a kernel of truth," Altman said, according to The Verge. "Are we in a phase where investors as a whole are overexcited about AI? My opinion is yes. Is AI the most important thing to happen in a very long time? My opinion is also yes." "Someone is going to lose a phenomenal amount of money," Altman reportedly said in reference to AI startups comprising "three people and an idea" that receive massive investments. "We don't know who, and a lot of people are going to make a phenomenal amount of money. My personal belief, although I may turn out to be wrong, is that, on the whole, this would be a huge net win for the economy." Taylor takes a similarly positive spin on the bubble question, comparing it to the dot-com boom. He referenced jokes about the word "agentic" being overused. "You have a lot of snake oil," he said. But there are also real, sustainable companies that Taylor predicts will stick around. Unsurprisingly, he pointed to the seismic growth of ChatGPT, which sported 100 million users just over two months after its app launch and remains dominant on the App Store. Taylor also pointed to AI software companies that serve the B2B market, like Lovable, a vibe coding platform for creating apps and websites. "I think there's very real value being created here," he said. Read the original article on Business Insider
