Zscaler (ZS) stock tanked further following the leak of Anthropic’s previously secret artificial intelligence (AI) model, Claude Mythos, which the firm described as representing a “step change” in cyber capabilities.
A recently discovered draft blog post in an unsecured data cache framed the model as presaging a wave of AI systems capable of exploiting vulnerabilities far faster than defenders can respond.
At the time of writing, Zscaler is trading down about 40% versus the start of this year.
What Claude Mythos Means for Zscaler Stock
This latest selloff in ZS shares reflects a deepening investor concern that increasingly capable AI models will fundamentally undermine demand for conventional cybersecurity products.
The market is pricing in a scenario in which frontier AI models could dramatically lower the barrier for sophisticated cyberattacks while simultaneously making defense software appear commoditized and replaceable.
For Zscaler, this may mean a major shift from being a toll booth for network traffic to a desperate race to prove that a human-centric Zero Trust architecture can survive in an era of autonomous, AI-powered offensive agents.
Is It Worth Investing in ZS Shares Today?
Investors should exercise caution as the macro environment offers no relief for Zscaler shares or the cybersecurity industry at large in 2026.
The Iran war, now entering its second month, has Brent crude (CBK26) hovering around $115 at the time of writing, fueling inflation fears and effectively eliminating the prospect of Fed rate cuts.
Rising bond yields often prove punitive for high-multiple growth stocks like Zscaler, given their valuations depend heavily on discounted future cash flows.
Finally, ZS is now trading firmly below its major moving averages (MAs), a technical setup that reinforces a strong downtrend that’s unlikely to fade anytime soon.
How Wall Street Recommends Playing Zscaler
Despite the aforementioned challenges, however, Wall Street firms remain bullish on ZS stock for the remainder of 2026.
According to Barchart, the consensus rating on Zscaler is currently a “Strong Buy,” with a mean price target of $233, indicating potential upside of nearly 75% from here.
On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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