Zscaler (ZS) Gains 2.9% as Snowflake Earnings Ease SaaS AI Fears

Zscaler (NASDAQ:ZS) shares rose 2.9% on May 28, 2026, closing at $130.06, after Snowflake’s soaring results provided a broad lift to software stocks and tempered the “SaaSpocalypse” narrative. Snowflake’s AI accounts jumped 62% quarter-over-quarter, product revenue grew 34%, and full-year guidance was raised by $180 million, signaling that AI is driving more consumption on data platforms rather than displacing them. The read-through boosted peers: ServiceNow and Palantir each gained roughly 5-6%, while the iShares Expanded Tech-Software ETF (IGV) advanced. The rally offered relief to Zscaler, which had plunged 31.5% a day earlier after its fiscal Q3 2026 report. That selloff was triggered by a 370-basis-point cut to free cash flow margin guidance, the departure of two senior sales leaders, and an initial FY27 outlook of only 16-17% revenue growth—a sharp deceleration from the current 25% pace. Zscaler remains down 40.9% year-to-date.