KeyBanc Cuts Zscaler Price Target to $176, Keeps Overweight Rating
KeyBanc lowered its price target on Zscaler to $176 from $190 while maintaining an Overweight rating, citing a widening gap in IT budgets between AI-focused and other firms.
KeyBanc has lowered its price target on Zscaler (NASDAQ:ZS) to $176 from $190, while keeping an Overweight rating on the stock. The revision follows the bank's chief investment officer survey for the first half of 2026, which revealed that the gap between IT budget haves and have-nots has widened further. According to the survey, spending on AI and AI-readiness has risen sharply in priority, benefiting security, data, infrastructure, and monitoring companies like Zscaler.
For traders, this analyst action underscores a key theme in the current market: AI-related spending is driving divergence in the tech sector. While Zscaler remains well-positioned as a cybersecurity leader, the lowered price target reflects a more cautious near-term outlook amid broader IT budget constraints. Live NowPrice data shows Zscaler shares reacting to the analyst update, with investors weighing the implications of the survey findings on future revenue growth.
Looking ahead, market participants will watch for Zscaler's upcoming quarterly earnings report and any commentary on AI-driven demand. The Guggenheim upgrade earlier in June, which set a $214 price target, provides a contrasting bullish view. Key levels to monitor include the $176 target from KeyBanc and the $214 target from Guggenheim, as the stock may trade within this range pending further catalysts.