This Growth Stock Is Down Over 40% in 2026. Will Investors Regret Not Buying the Dip?

Zscaler (NASDAQ: ZS) is one of the world's leading cybersecurity companies. Its zero-trust architecture was designed to protect businesses from the most serious cyber threats, including those powered by advanced technologies like artificial intelligence (AI).

The company released its operating results for its fiscal 2026 third quarter (ended April 30) after the market closed on Tuesday, May 26, and despite a relatively strong report, its stock plummeted by 31% the next day. The company announced that two senior members of its sales department had left, so management subsequently issued very conservative revenue guidance for fiscal 2027.

Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »

Zscaler stock is now down 42% in 2026, but could this be a long-term buying opportunity for investors?

A zero-trust cybersecurity architecture treats every attempted connection to a corporate network as hostile, meaning that nobody receives automatic access. Zscaler's Zero Trust Exchange verifies each user not only by their login credentials, but also by analyzing the device they are using and their location. This increases the odds of stopping an imposter.

But the Zero Trust Exchange goes even further. It only connects employees to the specific applications they need to complete their jobs, so even if a malicious actor does bypass the identity security layer, they won't have unrestricted access to the entire corporate network. In essence, this minimizes the damage from a successful breach.

In 2024, Zscaler expanded its focus to include "branches," which can be anything from a warehouse to a factory to a retail store. This culminated in a product called Zero Trust Branch, which isolates those assets from the rest of the corporate network, so even if one of them is breached, the hacker can't compromise the rest of the organization.

Zscaler is now extending the Zero Trust Exchange to include AI agents, allowing enterprises to choose which specific applications or data files agents can access in order to complete tasks. This eliminates a hacker's ability to gain access to all of an organization's valuable assets by hijacking a single agent.