Zscaler (ZS): Capitalizing on Cybersecurity Relative Value Soumya Eswaran Fri, October 16, 2026 at 9:33 AM EDT 3 min read ZS -1.50% NVDA -0.76% Explore stocks on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
Emerald Wealth Partners, an independent asset and wealth management firm based in Zurich, released its Q3 2026 investor letter for the "Growth Equity Strategy". The letter can be downloaded here. In Q3 2026, market performance was defined by pronounced sector rotations, as a rebound in software equities contrasted with a sharp correction in semiconductors, particularly memory. The portfolio outperformed growth benchmarks, driven mainly by software holdings; semiconductor holdings, by contrast, weighed on returns. Strategic profit-taking in outperformers enabled reinvestment into attractive, high-conviction opportunities like Nvidia and Zscaler. Despite rising financing costs and uncertainties in the AI sector, critical indicators highlight robust technology adoption and productivity gains. The challenge for growth investors is to navigate investments in AI cautiously while anticipating its transformative potential. While macro headwinds and AI financing uncertainties persist, underlying tech adoption and productivity gains remain robust, favoring a disciplined investment approach anchored in clear AI roadmaps and sound risk management. Also, check the strategy's top five holdings to see its best picks in 2026.
In its Q3 2026 investor letter, Emerald Wealth Partners Growth Equity Strategy highlighted Zscaler, Inc. (NASDAQ:ZS) as a new portfolio holding. Zscaler, Inc. (NASDAQ:ZS) is a global cloud security company that offers cyberthreat protection products. On October 15, 2026, Zscaler, Inc. (NASDAQ:ZS) closed at $220.43, with a $35.94 billion market capitalization. Zscaler, Inc. (NASDAQ:ZS) posted a 2.00% YTD pullback, trading within a 52-week range of $114.63 to $336.99.
Emerald Wealth Partners Growth Equity Strategy stated the following regarding Zscaler, Inc. (NASDAQ:ZS) in its Q3 2026 investor letter:
"We redeployed part of the proceeds into Nvidia and Zscaler, Inc. (NASDAQ:ZS), both of which had lagged the broader market for what we considered to be unjustified reasons. We also re-established a position in Zscaler, where our valuation model indicated significant upside and where product recognition in the market has improved meaningfully. Following a period of significant underperformance relative to its larger cybersecurity peers, we rebuilt part of the position we had sold last year at considerably higher prices."
Zscaler, Inc. (NASDAQ:ZS) is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 52 hedge fund portfolios held Zscaler, Inc. (NASDAQ:ZS) at the end of the second quarter, which was 46 in the previous quarter. While we acknowledge the potential of Zscaler, Inc. (NASDAQ:ZS) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
In another article, we discussed Zscaler, Inc. (NASDAQ:ZS) and noted that its shares jumped 5% upon reaffirming guidance, leading investors to weigh its valuation against an unraised outlook. In addition, please check out our hedge fund investor letters Q3 2026 page for more investor letters from hedge funds and other leading investors.
This article is originally published at Insider Monkey.
