The AI Bull Run: Why Nvidia and Zscaler Are Commanding Wall Street's Attention in 2025-2026

The technology-driven Nasdaq Composite index is experiencing a significant momentum shift. Since entering a bull market phase in April, the index has climbed roughly 53%, with historical precedent suggesting the rally could extend substantially. Going back to 1990, bull markets in the Nasdaq have delivered an impressive 281% average return, translating to approximately 31% compounding annual gains. This pattern raises an important question for investors: which companies stand to benefit most from this sustained tech momentum?

The AI Infrastructure Thesis: Nvidia’s Undisputed Position

Nvidia remains the cornerstone holding for investors seeking AI exposure. The semiconductor giant demonstrated robust financial momentum in its latest quarter, with revenue surging 62% year-over-year to reach $57 billion. This growth was distributed across its core business segments—data center operations, gaming platforms, professional visualization tools, and emerging automotive/robotics ventures. Simultaneously, non-GAAP net income climbed 60%, hitting $1.30 per diluted share.

The investment narrative around Nvidia centers on its dominant position within data center GPU (graphics processing unit) architecture, the critical hardware layer powering AI workloads and machine learning operations. Beyond chip manufacturing, Nvidia has established formidable competitive advantages through its CUDA software ecosystem—a comprehensive collection of code libraries and developer tools that create substantial switching costs for enterprises.

While competitors including Meta have begun exploring custom silicon solutions using Alphabet’s tensor processing units, these alternatives face a structural disadvantage. Custom chips lack the mature software infrastructure that CUDA provides, meaning the total cost of ownership often favors Nvidia’s integrated approach. Market analysts project that Nvidia will retain between 70% and 90% of AI accelerator revenue share through 2033, during which the sector is forecast to expand at 29% annually.

Consensus earnings growth estimates suggest 37% annual expansion over the next three years for Nvidia. At a current valuation of 44 times forward earnings, Wall Street analysts see the stock as trading at a discount. Among 71 equity research analysts, the median price target stands at $250 per share, implying 41% upside from current levels near $177.

The Cybersecurity Angle: Zscaler’s AI-Driven Growth Vector

Zscaler represents a different exposure to the AI boom—one rooted in the expanding cybersecurity imperative. The platform specializes in zero-trust network architecture and cloud-based threat protection through its security service edge (SSE) offering. Rather than funneling all traffic through centralized data center appliances, Zscaler’s model decentralizes inspection and policy enforcement to the cloud layer, simultaneously enhancing network performance while reducing infrastructure costs.

The company’s scale provides a genuine competitive moat. Processing trillions of daily signals across its platform generates machine learning datasets that continuously sharpen threat detection capabilities. This dynamic was recognized when consultancy Gartner ranked Zscaler as a market leader in the SSE category, projected to expand at 22% annually through 2033.

Recent financial results underscore the company’s execution. In the first quarter of fiscal 2026 (ended October), Zscaler delivered revenue growth of 26% to $788 million while non-GAAP earnings climbed 25% to $0.96 per diluted share. Management now sees artificial intelligence creating a dual catalyst: the technology simultaneously amplifies cyberattack sophistication while creating entirely new asset categories requiring protection. This dynamic is evident in performance metrics—AI security product revenue expanded 80% during the most recent quarter.

Looking forward, Wall Street models adjusted earnings growth at 17% annually through fiscal 2028. At a current valuation of 72 times adjusted earnings, the multiple appears elevated on its surface. However, Zscaler has beaten consensus earnings estimates by 16% on average over the last six quarters, suggesting the market may be discounting future performance improvements.

Among 51 analysts covering the stock, the median price target is $330 per share, suggesting 31% upside from the current price near $251.

Market Context and Investment Considerations

The US equity market’s technology rotation into AI beneficiaries has concentrated significant capital flows into infrastructure providers and security-adjacent plays. Both Nvidia and Zscaler occupy distinct but complementary positions within this emerging landscape—one controlling the computational backbone, the other addressing the rapidly evolving threat surface that AI adoption creates.

Historical precedent from the Nasdaq’s bull market cycles indicates that technology leadership rotations often reward companies that establish sustainable competitive advantages early, exactly the positioning these two companies have cultivated.