Zscaler stock sinks 23% after cautious outlook; analysts trim price targets

Shares of Zscaler ZS plunged over 23% in Wednesday premarket trading after the cybersecurity company delivered better-than-expected quarterly earnings but issued cautious guidance that intensified concerns over slowing customer acquisition, rising competition and mounting infrastructure costs tied to the artificial intelligence boom. The sharp selloff highlighted growing investor sensitivity toward software companies whose valuations remain heavily dependent on sustained high growth, particularly in cybersecurity where competition has intensified sharply over the past year.