Brown Advisors Mid-Cap Growth Strategy Exited Zscaler (ZS) on Valuation

Brown Advisory, an investment management company, released its “Brown Advisory Mid-Cap Growth Strategy” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. The strategy underperformed its benchmark, the Russell Midcap® Growth Index, in the third quarter of 2025, which increased approximately 3%.  In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, Brown Advisory Mid-Cap Growth Strategy highlighted stocks such as Zscaler, Inc. (NASDAQ:ZS). Headquartered in San Jose, California, Zscaler, Inc. (NASDAQ:ZS) is a leading cloud security company. The one-month return of Zscaler, Inc. (NASDAQ:ZS) was -15.97%, and its shares gained 23.33% of their value over the last 52 weeks. On December 18, 2025, Zscaler, Inc. (NASDAQ:ZS) stock closed at $231.09 per share, with a market capitalization of $36.852 billion.

Brown Advisory Mid-Cap Growth Strategy stated the following regarding Zscaler, Inc. (NASDAQ:ZS) in its third quarter 2025 investor letter:

“We exited our position in Zscaler, Inc. (NASDAQ:ZS) on valuation. The company remains a leader in zero-trust network security with strong execution and margin expansion, but much of this strength now appears reflected in the current price.”

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Zscaler, Inc. (NASDAQ:ZS) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 50 hedge fund portfolios held Zscaler, Inc. (NASDAQ:ZS) at the end of the third quarter, compared to 60 in the previous quarter. While we acknowledge the risk and potential of Zscaler, Inc. (NASDAQ:ZS) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ZSCALER, INC. (NASDAQ:ZS) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Zscaler, Inc. (NASDAQ:ZS) and shared the list of trending AI stocks on Wall Street. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.