Zscaler (ZS) is still seeing strong demand for its cloud and AI products even as investor sentiment around the company has turned negative following its recent earnings report, Wedbush said in a note Wednesday.

The analysts said they recently attended Zscaler's annual user conference in Las Vegas, where product managers, clients, and channel partners provided "strong feedback" around the company's new AI security products.

Zscaler launched a "strong portfolio" of AI-backed cybersecurity tools during the event designed to provide guardrails for AI agentic deployments, Wedbush said.

Zscaler is "still in the early stages of capitalizing on the $120 billion serviceable addressable market opportunity," the note said, adding that figure includes over $16 billion in AI security, $20 billion for data security everywhere, and $19 billion for AI agentic operations.

The investment firm said it has a "bullish stance" on Zscaler as the company is "taking a methodical approach to deploying advanced AI cyber tools that directly address customers' key concerns around agentic deployments that have held them back."

Wedbush maintained Zscaler's outperform rating and the company's $220 price target.

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