Zscaler, Inc. (ZS) Expands AI Security Capabilities by Acquiring Red Canary Deal

Zscaler, Inc. (NASDAQ:ZS) announced on May 27, 2025, its definitive agreement to acquire Red Canary, a leading provider of Managed Detection and Response (MDR) solutions. The move aims at strengthening the company’s AI-powered security by incorporating Red Canary’s automation-led threat detection capabilities into its Zero Trust Exchange platform.

Zscaler, Inc. (ZS) Expands AI Security Capabilities by Acquiring Red Canary Deal

An employee standing in front of a large data center, looking toward the future of cloud security.

Through the acquisition, Zscaler, Inc. (NASDAQ:ZS) aims to merge its cloud-scale data fabric and global threat intelligence with Red Canary’s decade-long expertise in streamlining threat investigation.

Jay Chaudhry, CEO of Zscaler, Inc. (NASDAQ:ZS), made the following comment:

“The proposed acquisition of Red Canary is a natural expansion of our capabilities into managed detection and response and threat intelligence to accelerate our vision of AI-powered SOC of the future. By integrating Red Canary with Zscaler, we will deliver to our customers the power of a fully integrated Zero Trust platform and AI-powered security operations.”

The company has also recently invested in tools like Risk360 and Exposure Management, signaling Zscaler, Inc. (NASDAQ:ZS)’s intent to shift toward a fully integrated and intelligent Security Operations Center.

Investor sentiment remains strong for Zscaler, Inc. (NASDAQ:ZS). Shortly after the deal was revealed, Cantor Fitzgerald raised its price target from $250 to $275 while maintaining an Overweight rating. Analysts from Stephens & Co. also reiterated an Overweight stance, stressing their confidence in the company’s growing role in enterprise cybersecurity.

While we acknowledge the potential of ZS as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than ZS and that has 100x upside potential, check out our report about the cheapest AI stock.

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Disclosure: None.