How Zscaler’s (ZS) Microsoft Entra Partnership Could Influence Its Competitive Edge in AI Security

• Zscaler, Inc. was recently named an early adoption partner in the Microsoft Entra Agent ID partner ecosystem, integrating its platform with Microsoft's latest agent identity solutions to enhance AI security and authentication for enterprise clients.
• This partnership underscores Zscaler’s commitment to advancing interoperability and Zero Trust protections across cloud and AI technologies, strengthening its role in shaping enterprise security practices.
• We'll assess how Zscaler's deepening integration with Microsoft Entra Agent ID may impact its long-term competitive positioning and growth potential.

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Zscaler Investment Narrative Recap

To be a Zscaler shareholder today, you need to believe that its cloud-native security platform can maintain an edge even as tech giants consolidate cybersecurity features. The recent integration with Microsoft Entra Agent ID enforces Zscaler’s relevance in securing AI-driven enterprise operations, but it does not materially reduce the primary risk that cloud providers could still narrow Zscaler's market share. The most important short-term catalyst remains robust customer demand for AI and Zero Trust solutions; the biggest risk is still platform competition from hyperscalers.

One announcement that stands out alongside this news is the October partnership expansion with HCLTech, focusing on AI-powered network transformation and zero-trust security services. This collaboration is particularly relevant as it amplifies Zscaler’s presence in enterprise AI deployment, feeding into the same demand themes driving both the Microsoft partnership and overall customer adoption, a key catalyst for future growth.

However, despite the momentum, investors should also keep in mind the ongoing risk surrounding major cloud vendors aggressively bundling security features, as this could...

Read the full narrative on Zscaler (it's free!)

Zscaler's narrative projects $4.7 billion revenue and $139.8 million earnings by 2028. This requires 20.5% yearly revenue growth and an earnings increase of $181.3 million from the current -$41.5 million.

Uncover how Zscaler's forecasts yield a $327.98 fair value, a 17% upside to its current price.

Exploring Other Perspectives

Eight fair value estimates from the Simply Wall St Community range from US$89.53 to US$327.98 per share. With hyperscaler competition posing a real threat, explore how your view aligns with other market participants.

Explore 8 other fair value estimates on Zscaler - why the stock might be worth less than half the current price!

Build Your Own Zscaler Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Zscaler research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Zscaler research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Zscaler's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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