Zscaler Tops Q3 Estimates, Names New CFO
Zscaler (NASDAQ:ZS) continues to climb on Friday, surging 9% on regular trading Friday, following a Q3 fiscal 2025 beat, with revenue up 23% year-over-year to $678 million versus the $667.1 million consensus and adjusted EPS of $0.84 topping the $0.76 estimate. G
Warning! GuruFocus has detected 5 Warning Sign with ZS.
AAP net loss narrowed to $0.03 per share, well ahead of the $0.12 loss forecast. Looking ahead, Zscaler guided Q4 revenue of $705 million$707 million (versus $707.2 million expected) and EPS of $0.79$0.80 (vs. $0.77), and reiterated full-year revenue of $2.659 billion$2.661 billion.
CEO Jay Chaudhry said surging AI adoption is driving demand for Zscaler's AI-centric security, noting investments to secure both public generative-AI apps and private models. The company also named Kevin Rubinveteran CFO of BetterUp and Alteryxas its new finance chief, aiming to propel Zscaler past $5 billion in ARR.
Investors should care because strong beats, healthy guidance and Zscaler's AI security push signal durable growth in the cloud-security market as enterprises race to protect new AI deployments.
This article first appeared on GuruFocus.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
17 minutes ago
- Yahoo
Billionaires Stanley Druckenmiller and Stephen Mandel Both Exited Their Stakes in Nvidia and Have Piled Into This Leading Artificial Intelligence (AI) Stock Instead
Quarterly-filed Form 13Fs offer investors a way to track which stocks Wall Street's preeminent money managers are buying and selling. Over a 12-to-15-month span following June 2023, Duquesne Family Office's Stanley Druckenmiller and Lone Pine Capital's Stephen Mandel sent their respective Nvidia positions packing. However, these two billionaire asset managers can't stop buying a world-leading chip company that plays an indispensable role for the artificial intelligence (AI) revolution. 10 stocks we like better than Nvidia › Data is Wall Street's currency, and there's an abundance of it to go around. Between earnings season -- the six-week stretch each quarter where most S&P 500 companies report their operating results -- and economic data releases, there's an almost overwhelming amount of information for investors to absorb. Occasionally, something important can fall through the cracks. For example, May 15 marked the deadline for institutional investors overseeing at least $100 million in assets under management to file Form 13F with the Securities and Exchange Commission -- and you might have missed it. This filing, which is due no later than 45 calendar days following the end to a quarter, details which stocks, exchange-traded funds (ETFs), and (select) stock options Wall Street's brightest money managers purchased and sold in the latest quarter. It can offer big-time clues as to which influential stocks are garnering interest or falling out of favor. While Berkshire Hathaway's Warren Buffett is the stock market's most-followed money manager, he's far from the only billionaire investor known to move markets. For instance, Duquesne Family Office's Stanley Druckenmiller and Lone Pine Capital's Stephen Mandel have exemplary investment track records of their own, along with billions of dollars in assets under management. What's particularly noteworthy about the first-quarter 13Fs from Druckenmiller's and Mandel's respective funds has been their approach to the artificial intelligence (AI) revolution. Both billionaires have dumped the preeminent AI stock on Wall Street in favor of a company that's critical to enterprise AI data centers. With the analysts at PwC pegging the addressable market for artificial intelligence at $15.7 trillion by 2030, there's room for hundreds of businesses to get their piece of the pie. However, no company has been a more direct beneficiary of the evolution of AI than Nvidia (NASDAQ: NVDA). It's also the stock billionaires Stanley Druckenmiller and Stephen Mandel sent packing. Accounting for Nvidia's 10-for-1 forward split in June 2024, Duquesne Family Office held 9,500,750 shares in the June-ended quarter of 2023. Meanwhile, Lone Pine Capital possessed 6,416,490 shares of Nvidia, also at the end of June 2023. But over the following 15 months for Druckenmiller and 12 months for Mandel, both billionaires would oversee the complete purge of their respective fund's Nvidia holdings. While there's no denying that Nvidia's Hopper (H100) graphics processing unit (GPU) and Blackwell GPU architecture are the preferred options in AI-accelerated data centers, and it's pretty clear that no other external competitors are particularly close to challenging Nvidia's hardware in terms of compute abilities, there are still viable reasons for Druckenmiller and Mandel to have cashed in their chips. One obvious reason to sell is simple profit-taking. Nvidia stock skyrocketed from early 2023 into late 2024, which increased its valuation by more than $3 trillion. We've never witnessed a megacap business add $3 trillion in market cap so quickly before, which may have encouraged these two billionaires to lock in their gains. But there might be more than just profit-taking behind this selling activity. For instance, it's only logical to expect competitive pressures to mount in the hardware arena. Even though Hopper and Blackwell hold most of the AI-GPU market share in high-compute data centers, external competitors are ramping up production of existing chips and bringing more energy-efficient hardware to market. What's more, many of Nvidia's top customers by net sales are developing AI-GPUs and AI solutions of their own. Even though these chips aren't going to be as fast as the Hopper or Blackwell, they're expected to be considerably cheaper and they won't be backlogged like Nvidia's hardware. This is a direct threat to the AI-GPU scarcity that's afforded Nvidia superior pricing power for its GPUs. History isn't exactly in Nvidia's corner, either. Despite AI supporting a lofty addressable market, every next-big-thing technology and innovation for more than three decades has endured an early stage bubble-bursting event. In short, investors have a historically strong tendency to overestimate how quickly a new innovation will gain utility and be adopted on a mainstream basis. With artificial intelligence likely needing time to mature as a technology, it's the most-direct beneficiary, Nvidia, which could feel the pain if a bubble forms and bursts. While Duquesne's and Lone Pine's billionaire chiefs pared down the number of stocks they're holding amid a volatile first quarter, there's one artificial intelligence stock both have been buying -- and it plays a vital role in the expansion of AI-accelerated data centers. The new AI apple of Druckenmiller's and Mandel's eye is none other than leading chip fabrication company Taiwan Semiconductor Manufacturing (NYSE: TSM), which is more commonly known as "TSMC." Duquesne more than quintupled its existing stake by adding 491,265 shares of TSMC during the March-ended quarter, while Lone Pine's 13F shows that 104,937 shares of TSMC were purchased in the first quarter of 2025. Most AI-GPU companies rely on Taiwan Semi's fabrication services, including industry leader Nvidia and key rival Advanced Micro Devices. TSMC is in the process of rapidly expanding its monthly chip-on-wafer-on-substrate (CoWoS) capacity from approximately 35,000 units in 2024 to an estimated 135,000 units monthly by 2026. CoWoS is a technology used to package high-bandwidth memory, which is necessary for high-compute data centers where software and systems are making split-second decisions. With demand for AI-GPUs overwhelming their supply over the last two years, TSMC has enjoyed a significant backlog for its chip fabrication services and has seen more its net sales skew toward high-performance computing, which can yield higher margins for the company. On a year-over-year basis, TSMC's net sales from high-performance computing surged from 46% to 59%, as of the March-ended quarter. Although the possible bursting of an AI bubble would be a concern for Taiwan Semiconductor Manufacturing, the company's order backlog and revenue diversification offers some semblance of protection. For instance, 28% of net sales in the first quarter derived from advanced chips used in smartphones. Apple prominently leans on TSMC for the chips used in the iPhone. The great thing about smartphones and wireless service access is they've both evolved into basic necessities for most Americans. Even though demand for smartphone chips isn't growing as quickly as it once did, the cash flow from this segment tends to be highly predictable for TSMC. Taiwan Semi has a long runway of opportunity in Internet of Things and automotive, as well. As homes and vehicles become more technology-dependent, companies like TSMC will be relied on to manufacture these advanced chips. Lastly, Druckenmiller and Mandel may have been encouraged by the dip in Taiwan Semiconductor's stock in the first quarter. Though TSMC stock isn't (currently) historically inexpensive, its shares did drop to a forward price-to-earnings ratio of nearly 15 during tail-end of the March quarter. This makes for an attractive multiple, when compared to Nvidia. Before you buy stock in Nvidia, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Nvidia wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $651,049!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $828,224!* Now, it's worth noting Stock Advisor's total average return is 979% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 Sean Williams has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Apple, Berkshire Hathaway, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy. Billionaires Stanley Druckenmiller and Stephen Mandel Both Exited Their Stakes in Nvidia and Have Piled Into This Leading Artificial Intelligence (AI) Stock Instead was originally published by The Motley Fool Sign in to access your portfolio
Yahoo
17 minutes ago
- Yahoo
Warren Buffett Has 48% of His $281 Billion Portfolio Invested in 3 Exceptional Stocks
Buffett offers a lot of transparency into his investments, well beyond the required SEC disclosures. His top holdings are all long-term high-conviction stocks with classic Buffett-stock characteristics. Each stock commands a premium price, but the stocks look fairly valued for what you get. 10 stocks we like better than Berkshire Hathaway › One of the things that makes Warren Buffett a widely admired investor is his willingness to share how he does it. Buffett has been a student of the market since his first stock purchase more than 80 years ago. He shares mistakes made and lessons learned every year in his letter to Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) shareholders and at the annual shareholder meeting. Investors also gain insights into his and his team's investments through Securities and Exchange Commission filings disclosing Berkshire's portfolio changes. While Buffett has been a net seller of stocks the past few years, he still oversees a portfolio worth $281 billion as of this writing. And nearly half of that is invested in just three exceptional stocks. Buffett first bought shares of Apple (NASDAQ: AAPL) in 2016 when it traded at a valuation too low to ignore. Buffett saw the powerful moat created by the iPhone, locking hundreds of millions of consumers into the Apple ecosystem, and Berkshire Hathaway poured tens of billions of dollars into the stock duringthe next couple of years. At one point, Apple accounted for more than half of Berkshire's marketable equity portfolio. After selling a significant chunk in 2024, it now accounts for 22% of the portfolio. As mentioned, Apple benefits from a wide competitive moat thanks to the success of its iPhone. Apple's iPhone sales topped $200 billion in each of the past three years, and sales are on track to grow in 2025. The iPhone is the center of Apple's growing ecosystem of devices and services, helping the rest of the business grow. The services segment is a particularly bright spot for Apple, currently boasting a $100 billion annual run rate. Apple's services are significantly higher margin sources of revenue than its devices. As one of the fastest-growing segments of the business, Apple's overall profit margins are expanding as a result. When combined with Apple's huge share repurchase program, Apple is capable of producing meaningful growth in earnings per share. Apple faces some headwinds, though. First of all, it's in the crosshairs of the tariffs planned by the Trump administration. Its supply chain relies heavily on China and Taiwan. As a result, its costs could increase and it may have to pass those expenses on to consumers. That could dent its device sales. Additionally, Apple has been slow to develop competitive artificial intelligence services. It risks losing customers looking for more AI integrated capabilities from their phones and services. Apple customers tend to be locked into the ecosystem, which helps minimize that risk. Apple stock has fallen from its late-2024 all-time high, trading more than 20% below its peak. At its current price, the stock's valuation is about 28 times forward earnings. While Apple isn't the fast grower it once was, it holds a lot of potential to unlock value with AI services in the future while its iPhone and services businesses remain rock solid today. As such, it looks like a fair price to pay for the tech giant. American Express (NYSE: AXP) is a longtime holding for Buffett. He put about $1.3 billion into the stock in the 1990s and hasn't touched it since. Today, those shares are worth nearly $45 billion. Amex separates itself from other credit card companies by operating as both the card issuer and as the payments network. Most issuing banks partner with Visa or Mastercard to remit payments to vendors from customer accounts. Doing both allows Amex to exercise more control over the business and capture more of the economics of card payments. To that end, it's done extremely well, commanding higher interchange fees from businesses by attracting affluent households to its high-fee products. Amex has successfully raised the fees on its cards during the past few years. It reported an 18% year-over-year increase in net card fees during the first quarter, while its customers spent just 6% more compared to the first quarter of 2024. That said, the fees collected from processing payments is still its biggest source of revenue. During the past few years, Amex has shifted strategies to offer more credit products to customers. Its charge cards historically required customers to pay their full balance each month, but Amex now lets customers pay over time with interest. Its interest income grew quickly from 2021 through 2024, but slowed to just 11% growth in the first quarter. That's mostly due to the law of large numbers, as interest income now accounts for nearly a quarter of its revenue. Amex may be a bit more insulated from an economic slowdown compared to other banks and payment processors due to its focus on high-income households and lesser focus on interest income. As such, it's less susceptible to loan defaults. Amex trades for a significant premium relative to its most comparable competitor, Capital One Financial, but it arguably deserves a premium due to the strength of its customer base, its scale, and its ability to boost revenue through fee increases and more interest-bearing services. Coca-Cola (NYSE: KO) is another stock Buffett bought more than 30 years ago and has no plans to sell anytime soon. His original $1.3 billion investment in the company (yes, the same amount he invested in Amex) is now worth about $29 billion. Not to mention, Coke's paid out more and more each year in dividends. Berkshire shareholders will collect roughly $816 million in dividends from Coca-Cola this year. The appeal of the company is two-fold. First of all, it has one of the strongest global brands in history. The red Coca-Cola logo is known the world over transliterated into practically every language known to man. Its brand strength extends well beyond its flagship product, though, to include top-selling carbonated drinks, water, juice, and sports drinks. That gives it considerable pricing power, which it has used to help offset inflation in recent years. The second factor is its huge scale, which has made it cost-effective to create localized supply chains for producing and packaging its products. That's come to the fore in recent months as global trade policies put pressure on other global companies. Coca-Cola has managed to avoid the impact of tariffs more than its competitors, enabling it to keep its costs down. During its first-quarter earnings call, management warned it's not immune to global trade dynamics, but it's better positioned than most businesses. Both of those advantages helped Coke produce strong first-quarter results while reaffirming its forecast for the full year. Revenue grew 6% and earnings per share grew 1%. Those numbers might not seem impressive, but they look great compared to Coke's biggest rival PepsiCo, which saw revenue and earnings per share shrink in the first quarter. Coke's relative strength hasn't gone unnoticed. The stock price has climbed 15% year to date as of this writing, and the shares trade at 24 times forward earnings. That's higher than its historic average, but not outrageously so. With its strong position in the current economic environment, it might be worth paying a premium for Coca-Cola stock. You'll also collect a nice 2.8% dividend yield at the current price. Before you buy stock in Berkshire Hathaway, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Berkshire Hathaway wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $651,049!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $828,224!* Now, it's worth noting Stock Advisor's total average return is 979% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 American Express is an advertising partner of Motley Fool Money. Adam Levy has positions in Apple, Mastercard, and Visa. The Motley Fool has positions in and recommends Apple, Berkshire Hathaway, Mastercard, and Visa. The Motley Fool recommends Capital One Financial. The Motley Fool has a disclosure policy. Warren Buffett Has 48% of His $281 Billion Portfolio Invested in 3 Exceptional Stocks was originally published by The Motley Fool
Yahoo
17 minutes ago
- Yahoo
Billionaire fund manager drops no-nonsense verdict on US dollar
Billionaire fund manager drops no-nonsense verdict on US dollar originally appeared on TheStreet. Billionaire fund manager Tim Draper has not only made investments in Elon Musk's legendary companies Tesla (Nasdaq: TSLA) and SpaceX but also in crypto industry giants such as Coinbase (Nasdaq: COIN) and Robinhood (Nasdaq: HOOD). The billionaire is a well-known Bitcoin advocate who believes that the world's largest cryptocurrency is poised to become dominant as compared to the dollar, even among retailers. Draper has dropped another shocking warning regarding the U.S. dollar. He recently took to X to claim: The dollar is going extinct. "People will rush to spend it as it loses value. Retailers will soon prefer Bitcoin. And when they do, that's when people will start spending Bitcoin," Draper added. While Draper's warning could sound a little harsh, there is some truth to his concern. The U.S. dollar index (DXY), which measures the value of the dollar relative to a basket of foreign currencies, was quoted at 98.69 at the time of writing. The index has been struggling to stay above the 100 level since President Donald Trump initiated the tariff war on Apr. 2. In fact, it has found it increasingly difficult to touch this point since May 20. It's not only the dollar but also gold that falls low in Tim Draper's ranks, despite the fact that the bullion has been on a record-breaking spree this year. It hit its record high of $3,500 per oz. on Apr. 22 and was exchanging hands at $3,374.17 at the time of writing. Bitcoin also hit the record price of $111,970.17 on May 22, even as the king coin suffered in the wake of the tariff war. As per Kraken's price feed, Bitcoin was trading at $104,363.12 at press time. Billionaire fund manager drops no-nonsense verdict on US dollar first appeared on TheStreet on Jun 2, 2025 This story was originally reported by TheStreet on Jun 2, 2025, where it first appeared.
