Zscaler Shares Fall 1.36 as Cloud Security Threat Surge Sparks 56.3 Trading Volume Drop

Zscaler (ZS) closed August 5 at $280.27, down 1.36% with a trading volume of $280 million, a 56.3% decline from the prior day. The stock’s performance coincided with Red Canary’s midyear 2025 Threat Detection Report, a Zscaler subsidiary, revealing a 500% surge in cloud account threats compared to 2024. This spike, driven by expanded identity-based threat detection capabilities, underscores Zscaler’s strategic focus on cloud and identity security. The report highlighted two new cloud techniques—Data from Cloud Storage and Disable or Modify Cloud Firewall—entering the top 10 detected threats, aligning with Zscaler’s zero-trust architecture.

Acquisition of Red Canary has further solidified Zscaler’s position in AI-driven security operations, enabling unified threat intelligence and automation. The integration allows Zscaler to address evolving threats like the Scarlet Goldfinch group’s shift to fake CAPTCHA techniques. Additionally, Zscaler’s recent ransomware report noted a 146% rise in blocked attacks in 2025, emphasizing the company’s role in mitigating high-profile extortion risks. These developments validate Zscaler’s market approach of consolidating cloud security solutions rather than fragmented point tools.

The strategy of purchasing the top 500 stocks by daily trading volume and holding for one day returned 166.71% from 2022 to the present, outperforming the benchmark’s 29.18% by 137.53%. This highlights liquidity concentration in high-volume stocks as a key driver of short-term gains, particularly in volatile markets. The approach leverages immediate trading activity and diversification across liquid assets, though it remains unsuitable for long-term investors due to its reliance on rapid market fluctuations.