Why is Zscaler stock up 3.2% today?

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Zscaler rises 3.21% today to $167.20

Highlights

Zscaler delivered 25% year-over-year revenue growth to $898 million and annual recurring revenue reached $3.77 billion for the fiscal fourth quarter.
The company is reducing its workforce by 3% as part of a global restructuring plan, incurring $30 million to $33 million in associated charges and shifting focus to AI-native security solutions.
Shares of Zscaler consolidate between $156.91 to $177.49 with mixed momentum signals and a 59% probability of a move lower in the next five days.

Revenue jump and layoffs drive efficiency focus amid AI shift

Zscaler reported a 25% year-over-year increase in fiscal fourth quarter revenue to $898 million and annual recurring revenue rising to $3.77 billion. The company initiated a global restructuring plan, reducing its workforce by around 3% to improve efficiency amid $30–33 million in related charges. Zscaler also released its Agentic SOC AI-driven security operations platform and highlighted its strategic shift toward AI-native security during the Goldman Sachs Communacopia + Technology Conference 2026. Guidance for fiscal year 2027 points to a slowing rate of ARR growth.

Anton Kharitonov, expert at Traders Union, considers Zscaler’s rebound limited despite strong earnings and AI product announcements. He notes the stock remains pressured below major moving averages and points to neutral-to-bearish oscillator signals, with sellers still in control intraday. The recent restructuring and slowing ARR growth expectations add to fundamental concerns. He sees volatility persisting as the market questions the sustainability of growth. "Despite the AI narrative, I remain wary of downside risk — the technicals and fundamentals simply do not support a sustained rally at this stage."

Viktoras Karapetjanc, expert at Traders Union, sees recent AI-driven product launches and operational restructuring as reinforcing Zscaler’s bullish long-term potential. He believes revenue growth and strategic moves toward AI-native security set the stage for further expansion, even as ARR momentum moderates. In his view, the stock offers multiple setups as technical resilience builds above the 50-day moving average. "Guidance suggests some moderation, but the underlying bullish structure remains intact — I expect continued growth for Zscaler as the market rewards innovation."

Jainam Mehta, market strategist, notes that Zscaler is caught between bearish long-term signals and short-term upward momentum. He sees a potential tactical trade: a close above $168.91 could trigger a breakout toward $177.49, but failure to hold $161.54 may open up quick downside to $156.91. The volatility spike suggests a setup for active traders. "With oscillators mixed and price at key levels, I see room for contrarian trades around headline-driven moves this week."

Mixed momentum as price compresses between resistance and oversold signals

Zscaler is trading below both the 20-day ($178.69) and 200-day ($171.79) moving averages, but above the 50-day ($161.54), indicating near-term resilience after a longer period of downward pressure. The closest levels to watch are $168.91 as the immediate ceiling and $161.54 providing a near-term floor, with the Ichimoku Kijun line ($171.09) acting as resistance just overhead. Momentum signals are mixed: Moving Average Convergence Divergence (MACD) remains in Strong Buy territory, yet the Average Directional Index (ADX) is neutral at 19.37. Relative Strength Index (RSI) at 43.62 forecasts a sell, with Commodity Channel Index (CCI) and Stochastic RSI both registering oversold conditions. Bull/Bear Power (BBP) is negative at -8.95, confirming sellers remain in control intraday with an oversold bias. The Awesome Oscillator is neutral, in line with the lack of a clear directional move. The stock is up $5.2 or 3.21% after opening with a small downside gap (down $0.5, a 0.31% drop), now trading near the high of today’s $161.5 - $168.91 range. Intraday volatility stands at 4.59%, with momentum turning upward toward session highs despite broadly cautious oscillator signals.

Earlier, analysts noted that Zscaler's earnings-driven moves were among key stock catalysts, especially as investors weighed upcoming macroeconomic data and broader market direction. With the company now undergoing operational restructuring and shifting toward AI-native security, traders should focus on the $161.54-$168.91 range as the immediate zone for potential breakouts or breakdowns in the near term.

Source of Data: ZS Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

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