It's been no secret that investors fear artificial intelligence could render some software tools obsolete, though certain cybersecurity stocks like CrowdStrike and Palo Alto Networks have been exempt from the bad sentiment.

Zscaler hopes to join them, and its fiscal fourth-quarter earnings were a good step in that direction.

Shares of Zscaler rose late Thursday after it reported stronger-than-expected quarterly earnings and raised its outlook for the subsequent quarter.

Zscaler posted adjusted earnings of $1.19 a share, up from 89 cents a share a year ago and above Wall Street's expectations of $1.09 a share.

For the fiscal fourth quarter ended July 31, revenue grew 25% to $898.2 million, beating the consensus expectation of $877 million, according to FactSet.

The stock rose 5% to $186.27 in after-hours trading Thursday before giving back some of the gains. The stock closed the regular session up 2.9% at $177.80.

Zscaler also boosted its outlook for the fiscal 2027 first quarter, expecting a revenue range of $935 million to $939 million, above Wall Street's $927 million estimate.

The cybersecurity company projects first-quarter profit to range from $1.15 to $1.16 a share, while analysts polled by FactSet see earnings at $1.08 a share.

While Zscaler delivered positive quarterly earnings, it still faces an uphill battle to convince investors that cybersecurity platforms can keep pace with the massive growth of AI darlings like Broadcom and Nvidia.

Zscaler stock has fallen 21% this year, according to Dow Jones Market Data.

Like CrowdStrike and Palo Alto, Zscaler software protects corporate networks from cyberattacks. As Zscaler has dipped, CrowdStrike and Palo Alto stocks are up 83% and 80% this year, respectively.

Investors worry AI might render traditional security software obsolete, but the reality is the opposite: AI-driven agents allow attacks to launch threats at a scale and speed beyond human capability, making robust cybersecurity infrastructure more important than ever.

Zscaler's latest earnings mark a rebound from the prior quarter, when its fiscal fourth-quarter revenue guidance of $875 million and $878 million fell short of Wall Street's $878.6 million target.

While demand for cybersecurity remains robust, investors will likely continue to look for evidence of when new AI security features will convert into measurable growth.