This Company Fights Today’s & Tomorrow’s Cybersecurity Threats
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| By Michael A. Robinson |
They’re calling it the Mythos Moment, and it’s being billed as the coming “Cyberpocalypse.”
After all, Anthropic, the maker of Claude AI, recently said frontier AI could uncover hundreds of hidden cracks in our digital defenses — creating new doors for hackers to walk through.
Since that time, I’ve lost count of the stories written about hackers who could use advanced AI to obtain sensitive data and rob consumers of their hard-earned cash.
But I believe the greater risk is to focus too much on the future and not worry about all the hacks we get on a daily basis.
Just in recent weeks, we’ve seen hacks at Nike, Abbott Labs and Ernst & Young.
Coca-Cola had to shut plants at a $4 billion subsidiary after a ransomware hack.
In other words, hackers don’t need frontier AI to rob us blind.
With that in mind, today I want to tell you about a leader in the $302 billion cyber market that’s on pace to double its earnings in less than 2.5 years …
Fighting Fire with Fire
Of course, hackers aren’t the only ones using AI. Cybersecurity companies are putting it to work, too.
AI can help security systems analyze enormous amounts of network activity, identify suspicious behavior and respond to threats faster than human security teams ever could.
In other words, AI isn’t simply creating a new cybersecurity problem. It could also become one of our most important cybersecurity tools.
That’s why I’m not looking for a company focused exclusively on some futuristic AI threat. I want a “twofer.”
I want a cyber leader that can protect businesses from the attacks happening every hour of every day — while simultaneously using AI to prepare for the attacks of tomorrow.
And I believe I’ve found one.
Meet the Masters of Zero Trust
The company is Zscaler (ZS).
Founded in 2007, Zscaler helped pioneer an approach to cybersecurity known as “Zero Trust.” The concept is surprisingly simple.
Traditionally, companies built digital walls around their networks.
Once an employee or device got through that wall, it was generally considered trustworthy.
The problem? If hackers stole an employee’s credentials, they could potentially get through the front door and start moving around inside.
Zscaler takes a different approach.
Instead of automatically trusting someone because they’re “inside” the network, its technology verifies users and devices before allowing them to connect to applications.
Think of it like security inside a government building.
Getting through the front door doesn’t give you access to every room.
Your identity and authorization are checked whenever you try to access something sensitive.
This approach has become increasingly valuable as companies have embraced cloud computing and remote work. And Zscaler has become one of its biggest beneficiaries.
Today, the company serves more than 9,400 customers.
That includes more than 45% of the Fortune 500 and roughly 40% of the Global 2000.
Security for the AI Age
Now Zscaler is extending this same philosophy to AI. And that could create an entirely new growth opportunity.
Consider this: Employees are increasingly using AI tools for everything from writing emails to analyzing company data. But every time sensitive corporate information gets fed into an AI application, it creates another potential security risk.
The firm says data transfers to AI and machine-learning applications jumped 93% year over year during its second quarter.
Its platform can help businesses identify the AI tools employees are using, control which ones they can access and prevent sensitive information from being shared where it shouldn’t be.
Meanwhile, the company can use AI itself to strengthen its defenses — analyzing enormous amounts of activity to identify suspicious behavior and emerging threats.
That puts Zscaler on both sides of the AI equation.
It can help defend companies against the conventional attacks taking place today.
And it can help them navigate the new security problems being created by AI.
And judging by the numbers, customers seem to agree.
Growth You Can See
In its latest reported quarter, Zscaler generated $850.5 million in revenue, up 25% from a year earlier.
Annual recurring revenue (ARR) also climbed 25%, reaching $3.5 billion.
Perhaps more importantly, its biggest customers continue to spend.
Zscaler now has 748 customers generating more than $1 million in ARR, an 18% increase from last year.
Another 4,003 generate more than $100,000 annually.
And management recently raised its full-year outlook.
The company expects fiscal 2026 revenue of roughly $3.33 billion, representing nearly 25% growth.
It also increased its adjusted earnings forecast to between $4.10 and $4.11 per share.
Ready for Today — And Tomorrow
AI could eventually transform cybercrime.
But investors shouldn’t become so focused on tomorrow’s AI-powered hackers that they overlook the attacks already taking place today.
Companies are being breached. Data is being stolen. Operations are being disrupted.
And that’s creating tremendous demand for cybersecurity.
Zscaler gives us exposure to both sides of this opportunity.
Its Zero Trust platform addresses the attacks businesses are facing right now.
At the same time, its growing AI-security business positions it for the next generation of cybersecurity threats.
And the company has backed up that opportunity with strong, steady earnings growth.
Over the past three years, earnings have grown by an average of roughly 32% annually.
At that pace, earnings would double in less than 2.5 years.
Add it all up and you can see why Zscaler could offer investors the best of both worlds.
You can profit from the cybersecurity threats companies are fighting today — and the AI-powered threats they’ll be battling tomorrow.
Best,
Michael A. Robinson
P.S. Many people think that the best way to profit from the AI boom is to bet on the upcoming IPO Wars: Anthropic vs. OpenAI.
I’ve found an even better way to profit from whichever wins.
1https://www.cbsnews.com/news/coca-cola-fairlife-milk-production-ransomware-attack/
2https://www.zscaler.com/products-and-solutions/zero-trust-exchange-zte
