Zscaler (NASDAQ: ZS) Price Target Raised Amid Strong AI Demand and Growth Outlook

• Needham has increased its price target for Zscaler to $255.00, reaffirming a "Buy" rating.
• Zscaler projects significant growth, targeting over $8 billion in annual recurring revenue (ARR) by fiscal 2031.
• AI-related security needs are identified as the primary driver of demand growth for Zscaler's cybersecurity solutions.

Zscaler (NASDAQ: ZS) is a leading cybersecurity solutions provider that empowers businesses to control access to their applications and data. Its innovative Zero Trust Exchange connects approved users and systems to specific resources, enhancing cloud security by preventing full network access.

In recent investment insights, Needham has raised its price target for Zscaler to $255.00 from $215.00, maintaining a "Buy" analyst rating. A price target represents an analyst’s estimate of a stock's potential future trading value. Zscaler's stock was trading at $212.25 at the time of the update, positioning the new target $42.75 above its current price.

During its 2026 Investor Day, Zscaler reaffirmed its first-quarter and full-year fiscal 2027 financial guidance. The company also unveiled ambitious growth projections, outlining a path to achieve more than $8 billion in annual recurring revenue (ARR) by fiscal 2031, with a potential upside scenario reaching $10 billion. Annual recurring revenue is a key metric measuring revenue from ongoing subscriptions.

AI security needs are a significant focus in Zscaler’s strategic outlook. In a Schwab Network interview, CFO Kevin Rubin highlighted that artificial intelligence is rapidly becoming Zscaler’s primary driver of demand growth, as customers increasingly seek robust protection against sophisticated cyberattacks involving AI agents. CEO Jay Chaudhry emphasized that by limiting access to specific resources, Zscaler’s solutions make it considerably more challenging for attackers to navigate and compromise a company’s systems.

Zscaler's stock performance saw an increase of $10.45, or 5.18%, closing at $212.25. During the day, the stock traded within a trading range of $205.02 and $215.46, contrasting with its 52-week range of $114.63 to $336.99.