Zscaler shares jump 4.7% after Snowflake's earnings suggest the 'SaaSpocalypse' — fears that AI would make subscription software obsolete — has been overstated

Snowflake reported that AI accounts on its platform jumped from 9,100 to 13,600 in a single quarter, product revenue grew 34%, and full-year guidance was raised by $180 million. The company surged 35% on the news, its best single day ever. Snowflake's results showed that instead of AI displacing its platform, AI drove more consumption of it.

The 'SaaSpocalypse' thesis rested on the fear that autonomous AI agents (self-directed AI systems that can make decisions and perform tasks) would replace per-seat software licences, hollowing out established SaaS business models. Snowflake's earnings inverted that logic: enterprises are using AI to generate more workloads that run on data platforms, not replacing those platforms with AI.

Zscaler's own fiscal Q3 2026 results showed revenue grew 25% to $850.5 million and adjusted EPS of $1.08 beat consensus by 7%, but the company cut its full-year free cash flow margin guidance from 26.5–27% to 22.8–23.3%, citing surging costs for memory, storage and processors.

Zscaler shares closed the day at $130.06, up 2.9% from the previous close.