Zscaler's (ZS) annual recurring revenue target of over $8 billion by fiscal 2031 is powered by the company's Zero Trust Branch and Cloud, Data Security, and Security for AI platforms, alongside double-digit growth from the Zero Trust SASE for Users segment, RBC Capital Markets said in a research note emailed Wednesday.

The company's upside scenario of $10 billion in ARR by fiscal 2031 is predicated on faster-than-expected adoption of agentic AI, which management believes would speed up demand across the platform, analysts wrote.

On the viability of these targets, RBC believes AI will serve as a tailwind for the broader platform due to increased traffic, rising need for data security, and broader demand for architecture modernization, according to the note.

The brokerage said it reiterated its outperform rating on the stock and price target of $236 per share.

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