Zscaler's AI Agent Security Push: Will It Be a New Growth Driver?

Zscaler, Inc. ZS is aggressively expanding into artificial intelligence (AI) agent security, positioning itself at the center of a rapidly evolving cybersecurity need. As enterprises deploy AI agents across workflows, the attack surface is widening, creating demand for new security solutions tailored to machine-driven interactions. The opportunity is significant as enterprise AI usage is surging, with activity rising sharply and exposing critical vulnerabilities, including systems that can be compromised within minutes. At the same time, AI-driven traffic and applications are growing exponentially, forcing organizations to rethink traditional security models.

Zscaler’s platform is designed to address this shift. Its Zero Trust architecture enables direct, secure communication between users, applications and AI agents, reducing lateral movement and limiting breach risks. The company is also embedding AI-specific controls such as real-time traffic inspection, prompt monitoring and automated policy enforcement to secure agent interactions.

Zscaler already operates at a massive scale, processing hundreds of billions of daily transactions and leveraging large datasets to train its AI-driven security engine. During the second-quarter fiscal 2026 results, the company noted that it processed nearly 1 trillion AI transactions in calendar 2025. This scale provides a competitive advantage by enabling faster threat detection and improved response accuracy.

In the second quarter, Zscaler secured multiple large deals for its AI security solutions, including a Fortune 500 semiconductor manufacturer, a Global 2000 construction company, a Global 2000 utilities energy organization, a Global 2000 oil & gas enterprise, and a leading AI software and research firm. The company noted that bookings for its ZDX Advanced Plus platform, which is a part of the Agentic IT operations product, soared 80% year over year to $100 million in the second quarter.

Overall, Zscaler’s AI agent security push appears well-timed. If adoption continues at the current pace, it could become a meaningful contributor to long-term revenue growth. The Zacks Consensus Estimate for Zscaler’s fiscal 2026 and 2027 revenues indicates year-over-year growth of 24% and 19.6%, respectively.

How Do Rivals Fare Against Zscaler?

Palo Alto Networks, Inc. PANW and CrowdStrike Holdings, Inc. CRWD are aggressively expanding into AI-driven security, posing strong competition to Zscaler’s AI agent security push.

Palo Alto Networks is integrating AI across its Prisma and Cortex platforms to secure cloud workloads and automate threat detection. Its broad platform approach and strong enterprise relationships give it an edge in cross-selling AI security solutions. Palo Alto Networks is also investing heavily in AI-driven threat intelligence, which could compete directly with Zscaler’s Zero Trust-based AI protection model.

CrowdStrike Holdings is leveraging its Falcon platform and AI-native architecture to secure endpoints and workloads. Its focus on real-time threat detection and large-scale data analytics positions it well to handle AI-driven cyber risks. CrowdStrike Holdings is also expanding into identity and cloud security, areas where AI agents are increasingly active.

Zscaler’s Price Performance, Valuation and Estimates

Shares of Zscaler have plunged 21.2% over the past year, while the Zacks Security industry has risen 2.6%.

Zscaler One-Year Price Return Performance

Image Source: Zacks Investment Research

From a valuation standpoint, ZS trades at a forward price-to-sales ratio of 5.97, significantly below the industry’s average of 10.17.

Zscaler Forward 12-Month P/S Ratio

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for Zscaler’s fiscal 2026 and 2027 earnings implies a year-over-year increase of 21.7% and 13%, respectively. Estimates for fiscal 2026 and 2027 have been revised upward in the past 60 days.

Image Source: Zacks Investment Research

Zscaler currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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