By Callum Keown
Software stocks have had a wild ride this week but perhaps none more so than Zscaler. The cybersecurity company's shares fell 9% ahead of the open Friday despite beating earnings estimates after the bell Thursday.
The stock tumbled 10% on Monday as panic over the impact of artificial intelligence spread across the market. But then jumped 17% over the next three trading days as a broad-based recovery was followed by a more software-specific rebound on Thursday.
The initial reaction to Zscaler's earnings put the stock on course to bookend the week with sharp declines -- who'd be a software investor?
The results were pretty good. Adjusted earnings of $1.01 per share beat Wall Street estimates of 89 cents, according to FactSet data. Revenue jumped 26% year-over-year to $816 million in its fiscal second quarter, again beating expectations of $798 million.
Full-year guidance for between $3.99 and $4.02 per share was also ahead of the $3.92 consensus.
CEO Jay Chaudhry said all the right things -- that Zscaler is the "cybersecurity platform for the AI age," and that its Zero Trust platform was well-placed to capture the "unprecedented speed and scale of AI and agentic workflows."
Heading into earnings, the stock is down 26% this year. Investors just don't know how to value software stocks right now.
Write to Callum Keown at callum.keown@dowjones.com
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February 27, 2026 04:56 ET (09:56 GMT)
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