Zscaler CEO Pushes Back On AI Disruption Fears — Says Talks Of ‘SaaSpocalypse’ Overblown

• Zscaler's fiscal 2027 revenue guidance of $3.908 billion to $3.938 billion implies growth of 16.6% to 17.5%, compared with 25% in fiscal 2026.
• CEO Jay Chaudhry says users are the weakest link today, and AI agents will be ‘far more dangerous’ weak links tomorrow.
• Chaudhry says over 50% of Fortune 500 companies trust and depend on Zscaler.

Zscaler Inc. (ZS) CEO Jay Chaudhry said on Tuesday that more cybersecurity is needed as artificial intelligence (AI) models improve, in response to a question about whether AI could replace companies such as Zscaler.

Talking to CNBC on whether AI could replace companies such as Zscaler, Chaudhry said the talk of a “SaaSpocalypse” was overblown. He added that the models are evolving rapidly and “cyber is not keeping up,” partly because old cybersecurity technologies are being applied to the new world of AI.

Chaudhry’s comments come after the company reaffirmed its first-quarter (Q1) and fiscal 2027 guidance, first issued Sept. 3, as it hosted its Investor Day on Tuesday. At the time of this writing, ZS shares were trading more than 2% higher in the premarket session.

Zscaler Reaffirms Fiscal 2027 Guidance

For the fiscal first quarter (Q1), the company expects revenue of $935 million to $939 million, about 19% year-over-year growth, and non-GAAP earnings per share (EPS) of about $1.15 to $1.16.

For fiscal 2027, Zscaler expects revenue of $3.91 billion to $3.94 billion, up 16.6% to 17.5% from $3.35 billion in fiscal 2026, when revenue rose 25%.

Asked where he is seeing growth, Chaudhry told CNBC, “Every CEO, every board is wanting to embrace AI, and what’s holding back is lack of security.” He added that the pipeline for AI security solutions is strong.

Chaudhry On Hyperscalers And AI Models

Asked whether Zscaler has more competitors than it used to, including Nvidia (NVDA) and Amazon (AMZN), Chaudhry said, “We do, and we don’t.” 

According to Chaudhry, when hyperscalers arrived years ago, the word was that security companies would be gone because hyperscalers would build security into the cloud. “Never happened,” he said.

Hyperscalers and models are “destinations,” said Chaudhry, and you need “somebody like Zscaler, a neutral third party as a switchboard” that says which party can talk to which.

He said 50% of Fortune 500 companies “trust us and depend upon us.” 

Zscaler CEO On AI Agents

Talking about what he is seeing in cybersecurity, Chaudhry said the age of agentic AI requires better cybersecurity.

A user is the weakest link today, he said, but tomorrow, AI agents will be. He called them “probably far more dangerous” because they will act at machine speed and their numbers will keep growing.

What Retail Thinks About ZS Stock

Despite the recent exuberance around cybersecurity stocks, retail investors’ sentiment around ZS stock remained ‘bearish’ on Stocktwits. 

So far this year, ZS stock has fallen over 8%, while peers like CRWD and PANW have rallied more than 140% and 126%, respectively. The First Trust NASDAQ Cybersecurity ETF (CIBR), which holds all three stocks, has risen nearly 50% during this period.

See Also: Applied Digital Secures Up To 1 GW Of Potential Power Capacity In Finland, Says Talks With Hyperscale Customers Underway

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