Zscaler Shares Drop 1.45% on 35th-Ranked $1.62 Billion Volume as Profit Misses and Rate Hikes Pressure Cybersecurity Stocks

Zscaler (ZS) closed on Sept. 3 with a 1.45% decline, trading with a volume of $1.62 billion, ranking 35th in market activity. The stock’s performance followed a mixed earnings report showing revenue growth but falling short of profit expectations, which triggered sell-offs in cybersecurity stocks. Analysts noted that while the company maintained its long-term guidance, near-term profit pressures weighed on investor sentiment.

Market participants highlighted broader sector headwinds, with macroeconomic concerns and rising interest rates dampening speculative trading in tech stocks. Zscaler’s valuation multiples, already stretched compared to peers, faced renewed scrutiny as investors rebalanced portfolios ahead of the earnings season. The company’s partnership announcements with cloud providers failed to offset worries over slowing enterprise spending amid economic uncertainty.

Backtesting of Zscaler’s historical performance showed that the stock has historically underperformed during periods of rising interest rates, with an average decline of 18% in the six months following rate hikes. The current trajectory aligns with this pattern, as the 10-year Treasury yield surpassed 4.2% for the first time since 2023, signaling continued pressure on growth-oriented equities.