In the world of finance, Wall Street’s collective opinion can be a powerful indicator of a stock’s potential. When a consensus forms among analysts, it may signal a buying opportunity. Two companies, Zscaler and Confluent, have garnered near-unanimous support from analysts, with none recommending a sell. Their shares have plummeted 54% and 79%, respectively, from their all-time highs, making them attractive buys.
Both companies are poised to thrive in an AI-dominated landscape. Zscaler’s Zero Trust Exchange leverages AI to safeguard cloud networks from malicious actors. By treating every sign-on attempt as hostile, the technology analyzes login credentials, devices, and locations to ensure secure access. This process happens in mere seconds, thanks to AI. The Zero Trust Exchange goes a step further, connecting employees only to necessary cloud applications, thereby minimizing potential damage in the event of a breach.
Zscaler’s AI Analytics suite, including Risk360, analyzes 100 digital environment factors to determine a company’s vulnerability to online threats. This tool helps businesses understand potential financial losses and identify top risk drivers. Despite being less than a year old, these products are driving growth in upsells. Zscaler’s revenue reached $2.167 billion in fiscal 2024, a 34% increase from the previous year.
Confluent, meanwhile, is a data streaming pioneer, serving over 5,440 customers, including giants like Walmart and BMW Group. The rise of AI has created a new market for Confluent, as developers turn to the company to build data pipelines at scale. A survey found that 90% of IT specialists believe data streaming will drive innovation in AI. Confluent’s platform enables companies to refine data, create pipelines, and stream information directly to AI-powered applications, providing real-time responses.
With a trailing-12-month revenue of $865 million, Confluent has a long runway for growth, especially considering its $60 billion addressable market. Both Zscaler and Confluent have seen their stock prices plummet, making their valuations more attractive. Zscaler’s price-to-sales ratio has dropped to 11.8, while Confluent’s stands at 7.1. The consensus among analysts is clear: these two AI stocks are buys, with potential upside of 51% or more.
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