Can AI Replace Cybersecurity — the Historic Discount in Zscaler and Rubrik

Can AI replace cybersecurity professionals?

Over the past six months, the market's answer has been yes. Wave after wave of AI model releases sent the entire software sector into a selloff, dragging cybersecurity stocks down with it. Despite cybersecurity being the one line item in a tech budget that cannot be cut, shares dropped 30 to 60% on the fear that AI could handle the work.

The short answer: the selloff was overdone. And the discount it created is historic.

Cybersecurity Cannot Be Replaced by AI

There are functions a company cannot hand to AI. Cybersecurity is the clearest example.

Consider what happens when a network's security depends on an AI model that hallucinates. A single undiscovered flaw becomes a door for hackers. No amount of cost savings justifies the risk. One security breach costs multiples of whatever AI adoption would save.

The data confirms this. Cyberattacks from Iran-connected groups have surged, and hackers recently breached the director of the FBI. At a time when cyber threats are escalating, replacing security teams and systems with AI is a decision no serious enterprise would make.

Cybersecurity is the only category in a tech budget that never gets cut. Regardless of the economic cycle, regardless of AI advances, this spending only goes up.

Zscaler — the Only Stock That Checked All Four Boxes

Analyzing the valuations of 13 major tech stocks, Zscaler (ticker ZS) was the only name to meet all four screening criteria.

Down 59% from its 52-week high. Revenue growth at 24%, ranking in the top five. Current price-to-sales ratio of 6.6 against a five-year average of 17.2 — a 61% historical discount.

Anyone who has followed cybersecurity stocks long enough knows that a company growing revenue at 24% almost never trades at a 6.6 P/S. This sector has always commanded high premiums. The current price is an anomaly created by AI panic.

The growth-adjusted valuation — P/S divided by revenue growth rate — comes to 5.4, placing it among the cheapest of the 13 stocks.

Numbers alone are not enough, but Zscaler's competitive advantages align precisely with the data. The fastest-growing segments in cybersecurity are cloud, SASE (Secure Access Service Edge), and endpoint protection. Zscaler has a strong lineup in all three, along with emerging agentic security capabilities.

Discount depth, growth rate, and competitive moat — all three are aligned. This is a stock to add to in April.

Rubrik — Hidden Value in the Cross-Sell Advantage

Rubrik (ticker RBK) has received less coverage, but the investment case strengthens with every layer of research.

Down 55% from its 52-week high. Revenue growth above 20%. Trading at a 53% discount to its five-year average valuation and among the cheapest on a growth-adjusted basis.

Rubrik's core differentiator is cross-selling. It offers backup services, data security, and cybersecurity on a single platform. Customers who enter through one product naturally adopt others, creating a compounding revenue-per-customer dynamic.

Cheap against its own history. Cheap against its peers. A double discount zone.

Risks to Watch

The risks are real.

If the Iran conflict extends beyond expectations, the entire market could sell off further and cybersecurity names would follow. A cheap valuation is not a guarantee of a bottom.

AI is also genuinely automating portions of cybersecurity — threat detection, log analysis, and other repetitive tasks. This could affect headcount and margins at security firms. But this is augmentation, not replacement, and it actually raises the value of cybersecurity services over time.

Historical discounts of 61% and 53% already overcompensate for these risks. The risk-reward balance tilts heavily toward buying.