Zscaler Falls 4% as FY2027 Growth Guidance Overshadows Earnings Beat; CrowdStrike Slips, Palo Alto Holds Steady

Zscaler sank 5% after guiding FY2027 growth to just 17%, a sharp deceleration from fiscal 2026's 25% pace, pulling CrowdStrike lower.

SPY slipped 0.5% and QQQ held flat, making cybersecurity's sharp sector-wide decline stand out against a largely stable broader market.

Zscaler's October 6 Investor Day and September 9 product launch give management two near-term chances to rebuild the growth narrative.

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Cybersecurity software is under pressure again Friday morning after Zscaler ( NASDAQ:ZS ) issued fiscal 2027 growth guidance that overshadowed a clean fourth-quarter beat, and peers are drifting with it. The move sits against a broader tape that's only modestly softer, so the group weakness stands out.

The SPDR S&P 500 ETF Trust ( NYSEARCA:SPY ) is down 0.5% to $769.39, giving back a small piece of a hot summer run. The Invesco QQQ Trust ( NASDAQ:QQQ ) is essentially flat at $717.38, with large-cap tech holding its ground even as software wobbles.

Zscaler stock is down 4% to $170.25 and was down 21% year to date (YTD) through Thursday's close, the sharpest post-earnings move in the group and a clear signal that fiscal 2027 guidance is what set the tone. Meanwhile, Palo Alto ( NASDAQ:PANW ) shares are unchanged at $331.96, perhaps still digesting a similar guidance-day reaction from earlier in the week. CrowdStrike ( NASDAQ:CRWD ) stock is down 1% to $212.99, seemingly slipping in sympathy on a day the company itself has no catalyst.

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Zscaler reported fiscal fourth-quarter revenue of $898.2 million, up 25% year over year (YoY), alongside adjusted earnings of $1.19 per share that topped consensus. CEO Jay Chaudhry credited adoption of the company's Zero Trust architecture and pointed to agentic AI as a durable driver. Annual recurring revenue reached $3.77 billion, up 25%, with organic ARR growing 20% once the Red Canary contribution is stripped out, according to Zscaler.