Zscaler

ZS

Market cap $19.7B

The Undercovered Dozen spotlights 12 lesser-followed stocks and funds with actionable catalysts, valuation disconnects, and sector-specific opportunities. Highlighted ideas include AAOI's underestimated earnings momentum, OXLC's risk-reward in preferreds, and DGRO's quality dividend growth tilt toward financials. Conviction ratings range offer clear rationales tied to sector trends and event-driven catalysts.

SaaS stocks were trying to stage a modest rebound on Monday after a rough stretch, with some high‑profile names finally participating in what Jim Cramer called the "software empire" attempts to strike back.

ZS edges out PANW as strong Zero Trust adoption, rising estimates and lower valuation outweigh Palo Alto Networks' near-term acquisition pressures.

Zscaler, Inc. is rated Buy, with a $185 price target, due to elite growth, expanding margins, and a durable AI-driven security moat despite a 60% stock drop. ZS's financials remain robust: FY2026 revenue growth is guided at ~24%, FCF margin ~27%, and Rule-of-40 and Rule-of-62 metrics place it among top-tier software operators. The Zero Trust Exchange and AI-enabled platform provide a self-reinforcing data moat, driving competitive advantage and deepening enterprise integration, especially among Global 2000 clients.

Bitcoin's relative strength on Friday may offer a bullish clue for battered software shares — that is, if a past relationship still holds.

Treasury and Fed urgently convened major bank CEOs to address cyber risks from Anthropic's new AI model, Mythos. Anthropic's Claude Mythos Preview, released to select partners, can identify software vulnerabilities better than most humans, heightening cybersecurity disruption fears.

The most oversold stocks in the information technology sector presents an opportunity to buy into undervalued companies.

A strategist notes that the sector is once again testing a technical support level, which increases the likelihood that it will break that support.

U.S. software shares tumbled on Thursday after Anthropic held back the wide release of a powerful AI model over concerns ​it could expose hidden cybersecurity vulnerabilities, deepening investor fears about ‌the threat to traditional software firms.

Zscaler (NASDAQ:ZS) stock just got downgraded by BTIG from Buy to Neutral, with the firm removing its price target entirely.