Cybersecurity firm Zscaler on Monday said it will expand a partnership with Vectra AI to provide its customers with artificial-intelligence-based threat detection and response tools over more cloud-based products. Zscaler stock rose on Monday amid the news.
Vectra AI's tools will be integrated with Zscaler Internet Access, or ZIA, a cloud-based replacement for on-premises web security gateways, the companies said. Vectra AI's cybersecurity system had previously been integrated with Zscaler Private Access, a secure access service edge, or SASE, platform that supports remote workers and branch offices.
Zscaler provides cloud-based cybersecurity services via 150 data centers worldwide. Zscaler's web security gateways inspect customers' data traffic for malware.
Zscaler Stock Jumps In 2025
"This (Vectra AI) partnership crystallizes Zscaler focus on SASE and empowering its next gen (security operations center management) capabilities," TD Cowen analyst Shaul Eyal told IBD in an email. "It should be noted that many companies are targeting this market."
Meanwhile, Vectra AI in 2024 had about $150 million in annual recurring revenue, according to a TD Cowen report.
On the stock market today, Zscaler stock climbed more than 5% to 291.62 in afternoon trading. With Monday's gain, Zscaler stock has advanced 60% in 2025.
Zscaler holds an entry point of 289.53 and trades above a 5% buy zone.
The company on May 28 reported fiscal third-quarter earnings of 84 cents on an adjusted basis, up 18% from a year earlier. Revenue climbed 23% to $678 million, the San Jose, Calif.-based firm said.
Zscaler stock analysts expected earnings of 76 cents per share on sales of $666.5 million.
Also, fiscal Q3 billings rose 25% to $784.5 million, well above estimates for $759.7 million. Billings are a sales growth metric.
For the current quarter ending in July, Zscaler said it expects revenue of $706 million at the midpoint of guidance, slightly below estimates of $707.2 million.
Zscaler Stock: Red Canary Purchase
To build a broad security operations center platform, Zscaler has been on an acquisition spree. Last week, Zscaler agreed to buy Red Canary, a provider of managed threat detection and response services. The deal is expected to close in August. Financial terms were not disclosed.
Also, ZS stock holds a Relative Strength Rating of 95 out of a best-possible 99, according to IBD Stock Checkup.
Zscaler competes with Palo Alto Networks and Microsoft as well as well-funded startup Wiz. Google-parent Alphabet has agreed to buy Wiz.
Follow Reinhardt Krause on X, formerly Twitter, @reinhardtk_tech for updates on artificial intelligence, cybersecurity, quantum computing and cloud computing.
