Exploring Zscaler, Inc. (ZS) Investor Profile: Who’s Buying and Why?

You're looking at Zscaler, Inc. (ZS) because a stock with a market capitalization around US$48 billion, as of October 2025, demands attention, but the real question is who's driving the bus and why they're hitting the gas or the brakes. Right now, institutional investors-the big money like Vanguard Group Inc. and BlackRock, Inc.-collectively own a dominant 54% stake, representing over 91 million shares, which means their trading actions are defintely moving the stock price. But here's the quick math: while firms like Price T Rowe Associates Inc /MD/ added a massive 1,077,613 shares in Q3 2025, other major players like UBS GROUP AG simultaneously removed 1,236,962 shares, a 69.1% cut from their position, showing a real split in conviction. So, with the stock trading near $294.98 per share in November 2025 and insiders selling 52 times in the last six months, are the institutions buying the growth story or quietly managing risk?

Who Invests in Zscaler, Inc. (ZS) and Why?

You're looking at Zscaler, Inc. (ZS) because its growth profile is undeniable, but the key to your investment thesis lies in understanding who already owns the stock and, more importantly, why they are holding it. The direct takeaway is that Zscaler, Inc. is overwhelmingly a conviction play for large institutions and insiders, driven by its leadership in the Zero Trust security model and its exceptional recurring revenue metrics.

As of late 2025, Zscaler, Inc.'s ownership structure is heavily concentrated, which means the stock price is highly sensitive to the buying and selling actions of a few large players. Institutional investors hold the lion's share, owning roughly 54% of the outstanding shares. This group includes massive asset managers like Vanguard Group and BlackRock, which hold millions of shares, and their presence lends significant credibility to the company's long-term narrative. Retail investors, or the general public, hold a smaller but still influential stake of around 10%. This is a big-money stock.

The remaining significant portion is held by company insiders, including the founders and executives. For instance, co-founder and CEO Jagtar Chaudhry and Ajay Mangal are among the largest individual shareholders, each holding stakes of around 17% to 18%, respectively, as of October 2025. This high insider ownership is a double-edged sword: it shows management's interests are defintely aligned with shareholders, but it also means a large block of shares is controlled by a small group, which can limit float (the number of shares available for trading) and increase volatility.

Investment Motivations: Growth, Margin, and The AI Edge

Investors are attracted to Zscaler, Inc. for three core reasons, none of which include a dividend-it's a pure growth story. The first is its dominant market position in the cloud-native Zero Trust Exchange platform, which is replacing outdated network perimeter defenses. The second is its remarkable financial efficiency, and the third is its strategic move into AI security.

The financial health is what truly grabs institutional attention. The company's Annual Recurring Revenue (ARR) is already over $3.0 billion for the 2025 fiscal year, and its Remaining Performance Obligation (RPO)-the total value of unfulfilled customer contracts-hit an impressive $5.8 billion, representing a year-over-year growth of approximately 31%. That RPO figure is a clear indicator of future revenue visibility. Here's the quick math on profitability: the Non-GAAP Gross Margin sits at a robust 80%, with a Free Cash Flow Margin of 24%. That's software-as-a-service (SaaS) economics at its best.

The near-term opportunity lies in the company's aggressive push into AI. Its recent acquisition of SPLX and its partnership with the Microsoft Entra Agent ID partner ecosystem in November 2025 are clear signals to the market that Zscaler, Inc. is positioning itself to secure the entire enterprise AI lifecycle. This strategic focus is why analysts are forecasting strong top-line growth, with consensus sales estimates for the current fiscal year (FY2025) at approximately $3.27 billion, a year-over-year increase of about 22.3%. For a deeper dive into these numbers, you should read Breaking Down Zscaler, Inc. (ZS) Financial Health: Key Insights for Investors.

• Dominant Zero Trust platform leadership.
• Non-GAAP Gross Margin of 80% in FY2025.
• RPO of $5.8 billion signals strong future revenue.
• Strategic AI and cloud security partnerships.

Investment Strategies in Play

Given the high-growth profile and premium valuation, the strategies employed by Zscaler, Inc. investors are primarily centered on growth investing and momentum, not traditional value investing.

The largest institutions, like BlackRock and Vanguard, are predominantly long-term growth holders. They buy Zscaler, Inc. because it is a market leader in a secular growth industry (cybersecurity) and is included in major indices. They are essentially betting on the multi-year shift of enterprise security to the cloud, viewing the current high price-to-sales multiple as justified by the company's long-term cash flow potential and 22% Non-GAAP Operating Margin.

Hedge funds, however, show a more dynamic, short-term trading approach. In the third quarter of 2025 alone, we saw major shifts. For example, T. Rowe Price added over 1.07 million shares, while Citadel Advisors removed over 1.02 million shares. This indicates active management of positions, often using technical analysis or reacting to quarterly billings and Remaining Performance Obligation (RPO) announcements. They are looking to capitalize on the stock's volatility, which can be significant for a high-beta tech name.

The table below breaks down the primary strategies by investor type based on recent 2025 activity:

What this estimate hides is the risk of insider selling. While the large insider stake is good for alignment, the recent trend has been net selling by executives, which is common for mature growth companies but something to monitor closely. Your next step should be to look at the trend in non-GAAP earnings per share (EPS), which is expected to reach $3.66 for the current fiscal year, to gauge if the growth is translating to the bottom line as efficiently as the margins suggest.

Institutional Ownership and Major Shareholders of Zscaler, Inc. (ZS)

You want to know who is really buying Zscaler, Inc. (ZS) and what that means for your investment. The direct takeaway is that institutional investors-the big money like mutual funds and pension funds-hold the majority of the stock, which makes their trading patterns a crucial signal for the stock's near-term volatility and long-term strategy.

As of the end of the 2025 fiscal year's third quarter (Q3 2025), institutional ownership in Zscaler, Inc. hovers around 46.45% to 54% of the total shares outstanding, depending on the reporting methodology. This high concentration means ZS is defintely a stock sensitive to the collective decisions of these large players. When they move, the stock moves.

The Giants: Top Institutional Investors in Zscaler, Inc.

The list of Zscaler, Inc.'s largest shareholders is a who's who of the world's biggest money managers. These firms buy ZS for its clear market leadership in the Zero Trust Exchange platform, a core piece of modern cybersecurity infrastructure. They are betting on the sustained shift to cloud-native security.

Here's a quick look at the top institutional holders, based on the most recent filings, with values calculated near the November 2025 share price of approximately $294.98 per share:

Vanguard Group Inc. and BlackRock, Inc. are consistently the largest holders, mainly through their index funds (like Vanguard Total Stock Market Index Fund) and exchange-traded funds (ETFs). This means a large portion of ZS ownership is passive-they buy because ZS is in the index, not because of an active, stock-specific call.

Recent Shifts: Institutional Buying and Selling Activity

The more interesting data is the recent trading activity, which tells you what active managers are thinking. The 2025 fiscal year has shown a clear mix of conviction and caution, with significant buying and selling. In Q3 2025 alone, 506 institutional investors added to their positions, but 420 decreased their stakes. That's a lot of churn.

The largest recent moves in Q3 2025 highlight this divergence:

• Significant Buying: PRICE T ROWE ASSOCIATES INC /MD/ added 1,077,613 shares, a massive 150.2% increase in their holding, valued at an estimated $322.9 million.
• Significant Selling: UBS GROUP AG removed 1,236,962 shares, a 69.1% cut, with a transaction value estimated at $370.7 million.

Here's the quick math: the net institutional buying volume over the last two years totals over 22.8 million shares, representing approximately $5.48 billion in transactions. This shows a strong, long-term accumulation trend, even with recent quarterly volatility.

The Impact of Institutional Investors on Zscaler, Inc.

These massive institutional holdings play two key roles: they influence the stock price and they influence corporate strategy. When a few large funds decide to sell, even a small percentage of their stake, the sheer volume of shares can quickly drive down the stock price. This is the sensitivity you have to watch for.

On the strategy side, owning over 50% of the company means these institutions have a strong, collective voice on the board of directors and in major corporate decisions. They are the ones pushing management on environmental, social, and governance (ESG) factors, capital allocation, and, crucially for a growth stock like ZS, on maintaining high revenue growth and profitability targets.

The high institutional backing is a vote of confidence in Zscaler, Inc.'s long-term business model and its position in the cloud security market. It suggests that the Street believes the company will continue to deliver strong revenue growth, which was $719.23 million in the last reported quarter, beating the consensus estimate. For a deeper dive into the company's performance metrics, you should check out Breaking Down Zscaler, Inc. (ZS) Financial Health: Key Insights for Investors.

Your action item is simple: Monitor the quarterly 13F filings of the top ten holders. If you see a sustained, multi-quarter trend of net selling by active managers, that's a red flag. If you see accumulation, especially from active growth funds, it reinforces the bull case.

Key Investors and Their Impact on Zscaler, Inc. (ZS)

You want to know who is driving the Zscaler, Inc. (ZS) stock and why, and the short answer is that the big money is in, but they are constantly re-evaluating their positions. Institutional investors-the massive mutual funds, pension funds, and asset managers-hold a commanding stake, which means their collective moves dictate near-term stock volatility. This is a classic growth-stock dynamic: the big players are betting on the long-term cloud security story, but they are quick to trim or add based on quarterly performance and the competitive landscape.

The Heavy Hitters: Who Owns Zscaler, Inc. (ZS)

The institutional presence in Zscaler, Inc. is substantial, reflecting its status as a leader in the Zero Trust Exchange (a security model that assumes no user or device is trustworthy by default) space. As of the most recent filings in the 2025 fiscal year, institutional investors and hedge funds own a significant portion of the company, ranging from 46.45% to as high as 54% of the total stock outstanding. This group of over 1,500 owners holds a total of 91,718,079 shares.

The largest shareholders are the household names you would expect to see in a high-growth tech stock. The total value of all institutional holdings recently topped approximately $23.029 billion.

• Vanguard Group Inc.: Held 11,367,903 shares as of Q3 2025.
• BlackRock, Inc.: Held 7,791,752 shares as of Q3 2025.
• Fmr Llc (Fidelity): A major holder, reflecting strong mutual fund interest.

What this tells us is that Zscaler, Inc. is a core holding for passive index funds and large-cap growth managers. They see the long-term secular trend in cloud security as defintely worth the premium.

Recent Trading: Buy, Sell, or Hold?

The third quarter of the 2025 fiscal year saw a mix of aggressive buying and significant position trimming, which is typical for a stock that has seen its price increase by over 45% in the last year. You're seeing a rotation, not a panic.

Here is a quick look at some of the most notable moves from the Q3 2025 filings:

You can see the split: firms like T. Rowe Price are doubling down, signaling high conviction in the company's future earnings and its recent acquisition of AI security pioneer SPLX, while hedge funds like Citadel are taking profits or reallocating capital. This is the market pricing in the near-term volatility against the long-term growth story, particularly as the company continues to focus on its Zero Trust Exchange™ platform. For more on the company's foundation, you can check out Zscaler, Inc. (ZS): History, Ownership, Mission, How It Works & Makes Money.

Investor Influence and the Insider Factor

The sheer size of the institutional stake-around 51% to 54%-means the stock price is highly sensitive to their collective trading actions. If multiple large institutions decide to sell at once, you will see a rapid price drop. The good news is that this is mostly passive, not activist, money. We haven't seen any notable activist investors pushing for major strategic changes.

However, the most influential shareholder is actually an insider: CEO and Chairman Jay Chaudhry. He holds a significant personal stake, which was valued at roughly 17% of the company earlier in 2025. This is a massive vote of confidence and aligns his interests directly with yours as a shareholder. Still, it also means he has significant control over company direction and governance. The balance is this: the institutions provide capital and liquidity, but the CEO's large insider ownership provides stability and a clear, long-term vision, which is crucial for a founder-led tech company.

Market Impact and Investor Sentiment

You're looking at Zscaler, Inc. (ZS) and trying to figure out if the big money agrees with the growth story. Honestly, the institutional conviction is strong, sitting at a high 52.52% to 57.58% of shares outstanding as of late 2025, which is a significant vote of confidence from the market's most sophisticated players.

This high institutional ownership, where firms like Vanguard Group Inc. and BlackRock, Inc. hold massive stakes, means the stock price is extremely sensitive to their trading actions. For instance, Vanguard Group Inc. boosted its position by 8.3% in Q2 2025, acquiring an additional 824,626 shares, bringing their total holding value to approximately $3.36 billion. BlackRock, Inc. also remains a top holder, reporting 7,791,752 shares as of September 30, 2025. That's a lot of skin in the game, so they defintely believe in the Zero Trust Exchange platform's long-term potential.

• Institutional ownership: 52.52% of ZS shares
• Vanguard's Q2 2025 increase: 8.3% (adding 824,626 shares)
• BlackRock's holding (Q3 2025): 7,791,752 shares

But here's the quick math on a near-term risk: while institutions are net buyers, corporate insiders have been net sellers. Over the last three months of 2025, insiders sold a net 43,084 shares of company stock, valued at around $12.45 million. That divergence-institutions buying, insiders selling-is something you need to watch closely, even if the selling is often pre-scheduled.

Recent Market Reactions to Ownership Shifts

The stock market's reaction to Zscaler, Inc.'s ownership changes and financial announcements in 2025 has been a mixed bag of volatility and recovery. The company's strong fundamentals often cushion the blow, but market-wide sentiment still drives short-term price action. Despite a strong year-to-date return of 51.4% as of November 2025, the stock recently slid 8.2% in one week and 14.9% over the last month, showing its high-beta nature.

The immediate reaction to the Q3 FY2025 earnings was a sharp upward move. The stock traded up by 8.15% after Zscaler, Inc. reported non-GAAP earnings of $0.84 per share, easily beating the forecasted $0.76, with revenue climbing to $678 million against a $666.5 million forecast. This shows that beating expectations on key metrics, especially revenue growth, immediately validates the investment thesis for these large funds.

Conversely, when a major firm like Bank Julius Baer & Co. Ltd Zurich cut its stake by 17.6% in Q2 2025, selling 5,071 shares, the market barely flinched, mostly because the overall institutional accumulation trend remained positive. It's the collective institutional action that matters most here, not a single fund's reduction.

Analyst Perspectives on Key Investors and Future Impact

The analyst community is overwhelmingly bullish, which reinforces the buying activity from major investors. The consensus rating is a 'Moderate Buy,' with an average 12-month price target hovering between $312.39 and $328.98 as of November 2025.

Firms like Berenberg and Cantor Fitzgerald have recently initiated or reiterated 'Buy' and 'Overweight' ratings, with some setting targets as high as $400.00. This optimism is directly tied to Zscaler, Inc.'s leadership in the Secure Service Edge (SSE) market and its strategic investments, such as the acquisition of AI security pioneer SPLX, which enhances its Zero Trust Exchange platform.

The analysts' confidence is grounded in clear financial projections for the near term. For the upcoming quarter (Q1 FY2026), Wall Street projects revenues to reach $773.35 million, representing a 23.2% increase year-over-year, and earnings per share (EPS) of $0.85. This growth is what justifies the premium valuation and keeps the big institutional money anchored to the stock, despite the periodic volatility. You can get a deeper understanding of the company's foundation by reviewing its Mission Statement, Vision, & Core Values of Zscaler, Inc. (ZS).

Here is a snapshot of the recent analyst consensus:

What this estimate hides is the potential for a larger-than-expected bump from new AI-driven security product adoption, which could push the stock toward the higher end of the $350.00 to $400.00 price target range set by the most bullish analysts. Your action is to track the Q1 FY2026 earnings report on November 25 to see if the actual numbers validate the institutional buying spree.