Nvidia and Zscaler lead tech rally with groundbreaking AI and cybersecurity collaborations

Nvidia and Zscaler are driving a new wave of growth on the Nasdaq, underpinned by strategic partnerships and innovative AI-driven solutions that are reshaping technology markets through 2026.

The Nasdaq Composite, buoyed by a fresh bull market that began in April, has surged more than 50%, igniting enthusiasm among Wall Street analysts who foresee continued gains through 2026. Historical data dating back to 1990 underlines this optimism, showing average bull market returns on the Nasdaq of around 281%, with an annualised growth rate close to 31%. Leading the charge in this tech-driven rally are two notable artificial intelligence (AI)-focused stocks: Nvidia and Zscaler, both widely regarded as undervalued despite recent strong performance.

Nvidia, a powerhouse in the semiconductor sector, recorded impressive third-quarter results, with revenue soaring 62% to $57 billion and a 60% rise in non-GAAP net income to $1.30 per diluted share. The company’s dominant position in data centre GPUs, critical components accelerating AI workloads, coupled with its CUDA software platform, cements its competitive moat. Nvidia’s CUDA suite saves developers significant time and cost in deploying AI applications, an advantage over rival firms that develop custom AI chips lacking prebuilt software infrastructure.

Analysts predict Nvidia maintaining a commanding 70% to 90% share of the AI accelerator market through 2030, a sector expected to expand at an annual rate of 29%. Consensus estimates foresee Nvidia’s earnings growing at 37% annually over the next three years, making its current price-to-earnings ratio of 44 relatively attractive in such a dynamic growth environment. This bullish sentiment is further supported by a median analyst target price implying a 41% upside from its present valuation near $177 per share.

Nvidia’s momentum received a fresh boost in late September 2025 with its strategic $100 billion investment into OpenAI. This partnership allows OpenAI to harness Nvidia’s formidable computing infrastructure, providing 10 gigawatts of power, to develop next-generation AI models expected to launch by mid-2026. Industry projections suggest this collaboration could generate between $300 billion and $500 billion in additional revenue for Nvidia over time. However, regulatory restrictions preventing Nvidia from selling to China remain a complicating factor, along with concerns about its current premium valuation.

Complementing Nvidia’s AI leadership is Zscaler, a specialist in cloud-based cybersecurity solutions focused on zero trust network access. Its Security Service Edge (SSE) platform modernises corporate networks by shifting traffic inspection and policy enforcement to the cloud, improving network speed and reducing reliance on costly on-premises security hardware. Zscaler’s extensive operational scale, processing trillions of signals daily, strengthens its machine learning-driven threat detection, underpinning Gartner’s recognition of the company as a leader in the SSE market projected to grow 22% annually through 2033.

For fiscal 2026’s first quarter, Zscaler reported revenue growth of 26% to $788 million and a 25% jump in non-GAAP earnings to $0.96 per share, beating expectations and leading to a modest revision upward in its full-year guidance. The dual impact of AI technology intensifies cybersecurity needs due to faster and more damaging cyberattacks, while simultaneously broadening the category of IT assets requiring protection. Reflecting this, Zscaler’s revenue from AI-centric security products skyrocketed 80% in the first quarter.

Wall Street projects Zscaler’s adjusted earnings to grow 17% annually through mid-2028. Though its price-to-earnings ratio of approximately 72 is high, the company has outperformed earnings estimates by an average of 16% over six consecutive quarters, a trend that may justify the valuation. Notably, Zscaler’s stock performance in 2025 has surpassed Nvidia’s, with a 59% gain compared to Nvidia’s 32%, buoyed by strong fiscal 2025 revenue growth to $2.7 billion and a robust future revenue pipeline, with performance obligations up 31% to $5.8 billion.

Further strengthening Zscaler’s outlook is its recent strategic collaboration with Nvidia to integrate AI-powered copilot technologies into its Zero Trust Exchange platform. This partnership leverages Nvidia’s advanced AI frameworks, including NIM inference microservices, NeMo Guardrails, and the Morpheus platform, promising enhanced data processing capabilities and improved cybersecurity service delivery. The alliance blends Nvidia’s AI compute strength with Zscaler’s cloud security expertise, positioning Zscaler at the forefront of AI-driven cybersecurity innovation and enabling more sophisticated threat detection and IT operations support.

Taken together, Nvidia and Zscaler embody the intersection of AI’s explosive growth and its cybersecurity imperatives, offering investors compelling exposure to what many on Wall Street regard as a transformative wave. While Nvidia commands a dominant position in AI hardware and software infrastructure, Zscaler is harnessing AI to defend enterprises against increasingly complex cyber threats. Both companies appear poised for significant growth, bolstered by historic market trends and recent partnerships that deepen their technological moats and market reach.

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• ^[1] (The Motley Fool) – Paragraphs 1, 2, 3, 4, 5, 6
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• ^[6] (Nasdaq) – Paragraph 7
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Source: Fuse Wire Services