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Unit 42's annual subscription combines frontier models and human testing, but revenue and renewal data remain undisclosed. Summary

Palo Alto is productizing continuous attack simulation before revealing its economics.

Palo Alto Networks PANW, the AI-cybersecurity platform provider, launched a subscription service for continuous security testing on September 22, with shares trading around $408.28, up approximately 0.7%, at 10:59 a.m. ET on October 8. Unit 42 Continuous Frontier AI Defense combines specialized models from Anthropic and OpenAI with security experts to uncover weaknesses and help customers fix them. The pitch is straightforward: keep hunting for openings before attackers find them.

The commercial opportunity starts with repeat business. Palo Alto offers the service worldwide through annual subscriptions, although the announcement gives no pricing. The company says it spent $17 million developing and validating the approach over six months, including more than 100 customer engagements. Its assessments uncovered exposures at every customer tested, with 37% of those exposures rated high or critical. That supports the need for testing. It does not yet establish how profitable the service will be.

The valuation picture leaves little room for weak execution: shares sit 74.02% above the displayed GF Value estimate of $234.62. Turning occasional consulting assignments into ongoing subscriptions could build a steadier revenue stream. But the economics hinge on how much expert labor each account requires. Investors should watch customer adoption, renewals and service margins. Finding more vulnerabilities makes a compelling sales pitch; fixing them efficiently is what could turn that pitch into durable earnings.

Disclosures I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours.

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Shares of Palo Alto Networks, Inc. (NASDAQ:PANW – Get Free Report) reached a new 52-week high on Tuesday. The company traded as high as $416.70 and last traded at $422.22, with a volume of 100128 shares traded. The stock had previously closed at $406.76.

Analyst Upgrades and Downgrades PANW has been the subject of a number of recent research reports. Rosenblatt Securities lifted their price target on shares of Palo Alto Networks from $355.00 to $415.00 and gave the stock a “buy” rating in a research note on Wednesday, September 2nd. TD Cowen reissued a “buy” rating and issued a $440.00 price objective (up from $400.00) on shares of Palo Alto Networks in a research report on Friday. Truist Financial set a $400.00 price objective on shares of Palo Alto Networks in a report on Wednesday, September 2nd. Jefferies Financial Group reaffirmed a “buy” rating and set a $450.00 price objective (up from $335.00) on shares of Palo Alto Networks in a research report on Friday, August 28th. Finally, Piper Sandler reiterated an “overweight” rating and set a $410.00 target price (up from $345.00) on shares of Palo Alto Networks in a research note on Wednesday, September 2nd. Thirty-eight analysts have rated the stock with a Buy rating and twelve have assigned a Hold rating to the stock. According to data from MarketBeat, the company currently has an average rating of “Moderate Buy” and an average target price of $391.32.

Read Our Latest Research Report on Palo Alto Networks

Palo Alto Networks Trading Up 5.9% The company has a quick ratio of 0.87, a current ratio of 0.87 and a debt-to-equity ratio of 0.06. The business’s fifty day simple moving average is $363.84 and its two-hundred day simple moving average is $287.28. The company has a market cap of $352.22 billion, a price-to-earnings ratio of 845.12, a PEG ratio of 11.61 and a beta of 0.93. Palo Alto Networks (NASDAQ:PANW – Get Free Report) last issued its quarterly earnings data on Tuesday, September 1st. The network technology company reported $1.02 earnings per share for the quarter, topping the consensus estimate of $0.98 by $0.04. The business had revenue of $3.41 billion during the quarter, compared to the consensus estimate of $3.35 billion. Palo Alto Networks had a net margin of 2.67% and a return on equity of 8.50%. The company’s revenue was up 34.5% compared to the same quarter last year. During the same quarter in the previous year, the firm earned $0.95 EPS. Palo Alto Networks has set its FY 2027 guidance at 4.160-4.190 EPS and its Q1 2027 guidance at 0.960-0.980 EPS. On average, equities analysts predict that Palo Alto Networks, Inc. will post 2.31 EPS for the current year.

Insider Transactions at Palo Alto Networks In other Palo Alto Networks news, CAO Josh Paul sold 400 shares of the company’s stock in a transaction on Thursday, October 1st. The shares were sold at an average price of $395.70, for a total value of $158,280.00. Following the completion of the transaction, the chief accounting officer owned 77,987 shares in the company, valued at $30,859,455.90. This represents a 0.51% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is available at this hyperlink. Also, Director John P. Key sold 2,500 shares of the firm’s stock in a transaction dated Monday, September 14th. The stock was sold at an average price of $376.03, for a total value of $940,075.00. Following the transaction, the director directly owned 10,000 shares in the company, valued at approximately $3,760,300. The trade was a 20.00% decrease in their position. The SEC filing for this sale provides additional information. Insiders sold 53,960 shares of company stock valued at $20,719,959 over the last quarter. 1.40% of the stock is owned by corporate insiders.

Institutional Inflows and Outflows A number of hedge funds have recently added to or reduced their stakes in the company. Neville Rodie & Shaw Inc. boosted its holdings in shares of Palo Alto Networks by 0.7% in the third quarter. Neville Rodie & Shaw Inc. now owns 16,615 shares of the network technology company’s stock valued at $6,602,000 after acquiring an additional 110 shares during the period. Heartwood Wealth Advisors LLC grew its position in shares of Palo Alto Networks by 1.6% during the third quarter. Heartwood Wealth Advisors LLC now owns 6,039 shares of the network technology company’s stock worth $2,399,000 after acquiring an additional 95 shares during the last quarter. Silverleafe Capital Partners LLC acquired a new position in shares of Palo Alto Networks in the 3rd quarter valued at $572,000. Miller Global Investments LLC increased its holdings in shares of Palo Alto Networks by 406.7% in the 3rd quarter. Miller Global Investments LLC now owns 456 shares of the network technology company’s stock valued at $181,000 after acquiring an additional 366 shares during the period. Finally, First Citizens Financial Corp raised its position in Palo Alto Networks by 8.7% in the 3rd quarter. First Citizens Financial Corp now owns 688 shares of the network technology company’s stock valued at $273,000 after purchasing an additional 55 shares during the last quarter. Hedge funds and other institutional investors own 79.82% of the company’s stock.

Palo Alto Networks Company Profile (Get Free Report)

Palo Alto Networks, Inc is a cybersecurity company that provides solutions designed to help organizations protect networks, endpoints, cloud environments, applications and users from cyber threats. Its offerings include next-generation firewalls, cloud-delivered security services, secure access service edge (SASE) solutions, endpoint protection and security operations tools.

The company also provides platforms and services for cloud security, threat intelligence, incident response, vulnerability management and the automation of security operations.

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Key Takeaways PANW added 220 net new platformizations in fiscal Q4 2026, more than doubling its volume in two years.Platformized customers delivered net revenue retention above 120%, reflecting expanding product adoption.PANW secured $126 million and $72 million deals, expanding adoption across multiple security platforms. Palo Alto Networks (PANW - Free Report) is seeing strong momentum in its platformization strategy, which enables customers to standardize multiple security products on a unified architecture rather than relying on several separate tools. The company says this approach brings security data and policies together across control points, helping customers simplify operations and respond to threats in real time. PANW is using this strategy across Network Security, Cortex and Idira, while also expanding into areas such as SASE, AI security and observability.

The strategy is gaining traction with customers. In the fourth quarter of fiscal 2026, PANW added approximately 220 net new platformizations, more than twice the volume recorded when it began tracking the metric two years ago. The company also reported net revenue retention above 120% for its platformized customer cohort in the fourth quarter, indicating that customers are expanding their use of the platform.

Customer deals in the fourth quarter showed how Palo Alto Networks is using platformization to increase sales across products. A global telecom leader signed a $126 million agreement to expand its next-generation firewall footprint and replace legacy proxy providers with Prisma Access for SASE. A premier IT service provider signed a $72 million transaction covering Network Security, Cortex and Idira, with eight-figure investments in each. PANW also secured a $53 million deal with a leading global payments platform, which included a high-seven-figure commitment to Prisma AIRS as the customer expanded its enterprise AI initiatives.

The strategy is supporting growth across PANW's major platforms. Network and AI Security revenues grew 17% in fiscal 2026, while Cortex revenues rose 25% and Idira generated $1.26 billion in pro forma revenues, up 21%. PANW is targeting more than 4,000 platformizations by fiscal 2030 as part of its goal of reaching $20 billion in NGS ARR. The strong adoption of platformization and expansion across multiple security products provide a base for continued growth. As of now, PANW will need to maintain customer adoption and execute well across its expanding product portfolio to sustain this momentum.

How Competitors Fare Against PANWCompetitors like CrowdStrike (CRWD - Free Report) and SentinelOne (S - Free Report) are also gaining ground through platform expansion and AI innovation.

CrowdStrike ended its second quarter of fiscal 2027 with $5.84 billion in ARR, reflecting 25% year-over-year growth. The robust increase was fueled by the growing adoption of CrowdStrike’s Falcon Flex subscription model.

Though comparatively a small competitor, SentinelOne posted second-quarter fiscal 2027 year-over-year growth of 22% in its ARR. The growth was fueled by the rising adoption of SentinelOne’s AI-first Singularity platform and Purple AI.

PANW’s Price Performance, Valuation & EstimatesShares of Palo Alto Networks have jumped 115.1% in the year-to-date period compared with the Zacks Security industry’s appreciation of 104.7%.

PANW’s YTD Price Return Performance
Image Source: Zacks Investment Research

From a valuation standpoint, Palo Alto Networks trades at a forward price-to-sales ratio of 22.36X compared with the industry’s average of 20.17X. The Zacks Value Score of F suggests that PANW stock is overvalued.

PANW Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research

The Zacks Consensus Estimate for Palo Alto Networks’ fiscal 2027 and 2028 earnings implies year-over-year growth of 8.9% and 17.6%, respectively. The estimates for fiscal 2027 have been revised up by 7 cents over the past 30 days. The same for fiscal 2028 has been revised down by 2 cents over the past 30 days.

Image Source: Zacks Investment Research

Palo Alto Networks currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Unit 42 combines multiple cyber models with human validation, code recommendations and recurring exposure testing. Summary

Palo Alto is trying to turn security consulting into repeatable subscription revenue.

Palo Alto Networks PANW, the cybersecurity-platform company, introduced Unit 42 Continuous Frontier AI Defense on September 22, with shares up approximately 2.4% to $397.74 at around 10:29 a.m. ET Wednesday. The service gives customers ongoing security testing through an annual subscription. The valuation leaves little room for disappointment: shares stand 70.08% above the $233.85 GF Value estimate.

The service brings together Anthropic's Claude Mythos 5, OpenAI's GPT-5.6-Cyber and open-weight models to hunt for weaknesses and test whether attackers could exploit them. Palo Alto says its system recommends prioritized fixes, code changes and virtual patches, while security specialists verify findings and attack paths. The pitch is straightforward: keep testing as customers' systems change, then turn discoveries into fixes.

For investors, annual subscriptions could make security consulting revenue more predictable. But recurring billing alone does not guarantee attractive margins. AI usage and specialist reviews still carry costs. Renewals, service profitability and the amount of remediation that can be automated will determine whether this becomes a scalable earnings engine. At this valuation, a compelling product needs to deliver compelling economics.

Disclosures I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours.

Click for the complete disclosure

Key Takeaways PANW secured multiple seven-figure bookings from sovereigns, neoclouds and frontier AI labs in fiscal 2026.Agentic traffic on PANW's SASE platform surged ninefold over the past nine months. Network & AI Security revenues grew 17% to $8.35 billion in FY26, while software firewall ARR rose 29%. Palo Alto Networks (PANW - Free Report) is seeing growing demand for network security as companies expand their artificial intelligence (AI) infrastructure. Management expects the AI buildout to require significant new computing capacity, with sovereigns, neoclouds and frontier AI labs emerging as new buyers of security products. In fiscal 2026, Palo Alto Networks saw early traction from sovereigns, neoclouds and frontier AI labs, with multiple seven-figure bookings in the fourth quarter of fiscal 2026. As AI deployments expand, the company expects the resulting increase in traffic and data to create more opportunities for its Network Security business.

The increase in AI-related activity is already affecting the amount of traffic that enterprises need to secure. Agentic traffic on PANW's SASE platform increased 9x over the past nine months as autonomous AI systems became more common. The company expects this trend to continue as AI agents are deployed across network and cloud environments, creating a larger volume of machine-generated traffic and new security requirements. This is important for PANW because securing this traffic requires continuous inspection and real-time protection, areas that are already part of its network and SASE offerings.

This demand is already reflected in the performance of the Network & AI Security business. Network & AI Security revenues increased 17% year over year to $8.35 billion in fiscal 2026. Within the platform, software firewall ARR increased 29% in the fourth quarter and hardware firewall demand remained strong, helped by the adoption of Gen 5 appliances. PANW also displaced legacy providers in nearly 100 accounts, representing more than $400 million in contract value.

PANW expects Network & AI Security revenues to grow at a low-double-digit rate in fiscal 2027. As AI infrastructure expands and enterprises move more AI workloads into production, the need to secure data centers, networks and growing volumes of traffic could provide a steady demand opportunity for PANW. The Zacks Consensus Estimate for fiscal 2027 and 2028 indicates revenue growth of around 23.4% and 15.1%, respectively.

How Competitors Fare Against PANWFortinet (FTNT - Free Report) is also benefiting from rising demand to secure AI infrastructure. In the second quarter of 2026, its SASE Firewall business grew 34% to more than $2 billion, while product revenues increased 52%. Fortinet said customers are upgrading network security as AI workloads increase traffic and data volumes. The company also highlighted an eight-figure win with a cloud provider to secure AI data centers, following a seven-figure deal with the same customer in the first quarter. These trends show how AI infrastructure growth is driving demand for higher-performance network security.

Zscaler (ZS - Free Report) is seeing similar demand as enterprises adopt AI applications and agents. In the fourth quarter of fiscal 2026, Security for AI bookings increased more than 50% sequentially. The company also closed a seven-figure deal with a Fortune 500 transportation customer to secure its full AI lifecycle and another seven-figure deal with a semiconductor manufacturer to secure AI endpoints, agent-to-agent communication and model usage. Zscaler's total ARR increased 25% year over year, supported by growing demand for its Zero Trust platform.

PANW’s Price Performance, Valuation & EstimatesShares of Palo Alto Networks have rallied 112.4% in the year-to-date period compared with the Zacks Security industry’s appreciation of 95%.

PANW’s YTD Price Return Performance
Image Source: Zacks Investment Research

From a valuation standpoint, Palo Alto Networks trades at a forward price-to-sales ratio of 22.09X compared with the industry’s average of 19.23X. The Zacks Value Score of F suggests that PANW stock is overvalued.

PANW Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research

The Zacks Consensus Estimate for Palo Alto Networks’ fiscal 2027 and 2028 earnings implies year-over-year growth of 8.9% and 17.6%, respectively. The estimates for fiscal 2027 have been revised up by 7 cents over the past 30 days. The same for fiscal 2028 has been revised down by 2 cents over the past 30 days.

Image Source: Zacks Investment Research

Palo Alto Networks currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Key Takeaways Palo Alto Networks' Prisma AIRS surpassed $100 million in ARR within four quarters of general availability.Prisma AIRS had more than 800 customers, with multiple modules included in most large fourth-quarter deals.A $53 million platformization deal included a high-seven-figure Prisma AIRS commitment for AI initiatives. Palo Alto Networks (PANW - Free Report) is seeing growing demand for its AI security products as enterprises move more AI workloads into production. Prisma AIRS, the company's AI security platform, surpassed $100 million in annual recurring revenue (ARR) in the fourth quarter of fiscal 2026. It reached this milestone within four quarters of general availability, making it the fastest-scaling product in Palo Alto Networks' history. The product also had more than 800 customers, with most of the company's largest transactions in the fourth quarter including multiple Prisma AIRS modules.

Prisma AIRS is designed to secure different stages of enterprise AI use. Its capabilities now cover machine identities and credentials, monitoring of AI agents and real-time security controls through an AI gateway. This is becoming more important as companies expand their use of autonomous AI agents and deploy open-weight and open-source models. Palo Alto Networks expects these changes to increase the amount of infrastructure, data and traffic that needs to be secured.

The early customer demand also suggests that Prisma AIRS can support PANW's broader platform strategy. In the fourth quarter, PANW closed a $53 million platformization deal with a leading global payments platform. The customer committed a high-seven-figure amount to Prisma AIRS as it expanded its enterprise AI initiatives. The broader deal also included standardizing its network defense and architecture, showing how PANW is using platformization to expand its AI security business within existing relationships.

However, Prisma AIRS is still a relatively small part of PANW's overall business. For fiscal 2027, the company expects Network & AI Security revenues to grow at a low-double-digit rate, so the product will need to scale rapidly to become a major contributor. Still, its fast ARR growth, expanding customer base and rising need for AI security give Prisma AIRS a solid opportunity to become an important growth driver for Palo Alto Networks as enterprise AI adoption increases.

How Competitors Fare Against PANWCompetitors like CrowdStrike (CRWD - Free Report) and SentinelOne (S - Free Report) are also gaining ground through platform expansion and AI innovation.

CrowdStrike ended its second quarter of fiscal 2027 with $5.84 billion in ARR, reflecting 25% year-over-year growth. The robust increase was fueled by the growing adoption of CrowdStrike’s Falcon Flex subscription model.

Though comparatively a small competitor, SentinelOne posted second-quarter fiscal 2027 year-over-year growth of 22% in its ARR. The growth was fueled by the rising adoption of SentinelOne’s AI-first Singularity platform and Purple AI.

PANW’s Price Performance, Valuation & EstimatesShares of Palo Alto Networks have jumped 103.1% in the year-to-date period compared with the Zacks Security industry’s appreciation of 94.7%.

PANW’s YTD Price Return Performance
Image Source: Zacks Investment Research

From a valuation standpoint, Palo Alto Networks trades at a forward price-to-sales ratio of 21.00X compared with the industry’s average of 19.25X. The Zacks Value Score of F suggests that PANW stock is overvalued.

PANW Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research

The Zacks Consensus Estimate for Palo Alto Networks’ fiscal 2027 and 2028 earnings implies year-over-year growth of 8.9% and 17.6%, respectively. The estimates for fiscal 2027 have been revised up by 7 cents over the past 30 days. The same for fiscal 2028 has been revised down by 2 cents over the past 30 days.

Image Source: Zacks Investment Research

Palo Alto Networks currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The company's security franchise is expanding, but reported and adjusted earnings tell materially different stories. Summary

Palo Alto’s AI opportunity must translate into stronger reported profitability.

A widening AI-security opportunity pulled investors toward Palo Alto Networks PANW, the network and cloud-security company, Monday as cybersecurity names rallied on fresh AI-safety concerns. Shares climbed approximately 10.8% to $366.315, based on the updated market quote, strengthening the case that investors are treating cybersecurity as one of the more durable beneficiaries of the AI spending cycle.

Palo Alto's fourth-quarter numbers give that enthusiasm some operating support. Revenue rose 34% to $3.41 billion, while next-generation security annual recurring revenue reached $9.10 billion. The company also reported $172 million of GAAP operating income versus roughly $1 billion on an adjusted basis. Meanwhile, its Frontier AI Critical Defense Program is aimed at protecting critical infrastructure at the network layer while traditional software vulnerabilities are being fixed, giving Palo Alto another route into the rapidly expanding AI-security budget.

The valuation is where the story gets much tougher. The chart shows Palo Alto at $366.315 versus a GF Value™ estimate of $232.09, leaving the shares 57.83% above GF Value. That premium says investors are already paying heavily for future growth. With GAAP operating margin still around 5%, the next leg higher will likely require more than rising cybersecurity demand: Palo Alto needs to show that acquisitions, platform expansion and AI-security spending can translate into stronger reported profitability as well.

Disclosures I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours.

Click for the complete disclosure

Key Takeaways XSIAM ARR topped $700 million, up 70%, as its customer base surpassed 1,000 in fiscal 2026.PANW's platform approach drives multi-module XSIAM adoption and expansion across existing accounts.AI-driven threats and autonomous agents could boost demand for XSIAM's real-time security capabilities. Palo Alto Networks’ (PANW - Free Report) XSIAM business continued to grow rapidly in fiscal 2026. XSIAM ended the fourth quarter of fiscal 2026 with more than $700 million in annual recurring revenues (ARR), which increased 70% year over year and surpassed 1,000 customers. XSIAM was also a key growth driver for PANW’s Cortex business, which generated $1.92 billion in fiscal 2026 revenues, up 25% year over year.

XSIAM is benefiting from PANW’s platform approach. Customer telemetry is already available within XSIAM, allowing the company to add new capabilities without requiring customers to go through separate product integrations. The majority of XSIAM customers are using multiple modules, including exposure management and cloud security, which gives PANW more opportunities to expand within existing accounts.

The company is also positioning XSIAM to help customers respond to faster and more complex cyber threats. PANW said AI-driven attacks can identify vulnerabilities much faster, increasing the need for real-time detection and response. XSIAM supports this strategy by bringing security data together on a unified platform. For instance, a premier IT service provider included XSIAM in a $72 million transaction as part of a broader platformization deal. The customer made eight-figure investments across Network Security, Cortex and Idira.

PANW also sees AI deployment as a long-term demand driver for security operations. The growing use of autonomous agents is expected to create more network traffic, data and machine identities that enterprises will need to monitor and protect. Overall, XSIAM has several factors supporting continued growth, including its expanding customer base, multi-module adoption and rising demand for real-time security. The Zacks Consensus Estimate for fiscal 2027 and 2028 indicates revenue growth of around 23.4% and 14.4%, respectively.

How Competitors Fare Against PANWCompetitors like CrowdStrike (CRWD - Free Report) and SentinelOne (S - Free Report) are also gaining ground through platform expansion and AI innovation.

CrowdStrike ended its second quarter of fiscal 2027 with $5.84 billion in ARR, reflecting 25% year-over-year growth. The robust increase was fueled by the growing adoption of CrowdStrike’s Falcon Flex subscription model.

Though comparatively a small competitor, SentinelOne posted second-quarter fiscal 2027 year-over-year growth of 22% in its ARR. The growth was fueled by the rising adoption of SentinelOne’s AI-first Singularity platform and Purple AI.

PANW’s Price Performance, Valuation & EstimatesShares of Palo Alto Networks have jumped 80.9% in the year-to-date period compared with the Zacks Security industry’s appreciation of 71.8%.

PANW’s YTD Price Return Performance
Image Source: Zacks Investment Research

From a valuation standpoint, Palo Alto Networks trades at a forward price-to-sales ratio of 18.97X compared with the industry’s average of 17.14X. The Zacks Value Score of F suggests that PANW stock is overvalued.

PANW Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research

The Zacks Consensus Estimate for Palo Alto Networks’ fiscal 2027 and 2028 earnings implies year-over-year growth of 8.6% and 18.7%, respectively. The estimates for fiscal 2027 and 2028 have been revised up by 6 cents and 2 cents, respectively, over the past seven days.

Image Source: Zacks Investment Research

Palo Alto Networks currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

After sliding to start the year, Palo Alto Networks (PANW -0.52%) shares have come roaring back, trading up more than 80% so far in 2026. The cybersecurity stock benefits from the launch of Anthropic's Mythos models, which exposed previously unknown software vulnerabilities. The company said this has led to a shift in the security landscape and that it is just the start.

However, despite a strong recent earnings report and guidance, the stock price fell, as expectations were sky-high following its run-up this year. Let's dig into the company's latest earnings report and prospects to see if the stock's still a buy on this dip.

Image source: Getty Images.

Platformization strategy continues to pay off While it was a bold move at the time, Palo Alto's platformization strategy, where it decided to forgo selling point solutions in favor of offering three cybersecurity platforms, continues to pay dividends. The company saw 220 net new platformization additions in fiscal Q4, double the 110 it saw in the prior quarter. Meanwhile, net revenue retention among these customers surpassed 120%.

Palo Alto said that Mythos has driven platformization demand, as customers are increasingly looking for a unified platform to tackle potential AI threats. Right now, there is a big push among organizations to have real-time defense, which it believes can only be achieved with a unified platform. As such, it sees AI as a significant growth tailwind for both itself and the broader cybersecurity industry.

During the year, the company also bolstered its platform through two large acquisitions to enhance its cybersecurity capabilities. First, it bought real-time data monitoring company Chronosphere, which it closed in January, and then it acquired privileged access company CyberArk. It said both are exceeding early expectations.

The combination of platformization and acquisitions helped drive strong growth for Palo Alto in its fiscal 2026 Q4, ended July 31. Revenue climbed 34% year over year to $3.41 billion, which was above the high end of its previous forecast for revenue of between $3.345 billion and $3.355 billion. Subscription and support revenue jumped by 36% to $2.67 billion, while product revenue rose by 29% to $738 million.

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Next-generation security once again fueled Palo Alto's growth, with next-generation security annual recurring revenue (ARR) surging 63% to $9.1 billion. Network and AI security ARR rose 17% to $2.3 billion. Its Cortex Platform ARR rose 25% to $1.9 billion, with XSIAM (extended security intelligence and automation management) ARR surging 70%. Meanwhile, its Idira platform, which consists of its identity security platform from the CyberArk acquisition, contributed ARR of $644 million and was up 21% to $1.26 billion on an adjusted basis.

Adjusted earnings per share (EPS) increased by 7% year over year to $1.02, which was ahead of its guidance of $0.96 to $0.98.

Palo Alto forecasts fiscal 2027 Q1 adjusted EPS of between $0.96 and 0.98, with revenue rising 33% to 34% to between $3.3 billion and $3.31 billion. For the full fiscal year, it sees adjusted EPS coming in between $4.16 and $4.19 on a 23% to 24% climb in revenue to between $14.1 billion and $14.2 billion. It sees its next-gen security ARR rising 22% to 23% to a range of $11.075 billion to $11.175 billion.

Even after the drop in its stock price, Palo Alto stock still trades at a hefty forward price-to-sales ratio (P/S) of 19.5 times fiscal 2027 estimates and a forward price-to-earnings ratio (P/E) of 81 times 2027 estimates. While the company is well-positioned and has some nice tailwinds behind it, that's a hefty price to pay for a company growing its ARR in the low- to mid-20% range, with acquisitions.

As such, I would not be a buyer on this recent dip.

Shares of Palo Alto Networks (PANW +1.05%) surged 15% in August, according to data from S&P Global Market Intelligence. Cybersecurity stocks have seen booming investor demand due to the growing need for these services in the age of artificial intelligence (AI). Palo Alto Networks has seen its share price rise 320% in the last five years alone.

However, the stock has fallen over 10% this week, giving up most of its August gains, after reporting its Q4 earnings for fiscal year 2026. Here's why it rose in August and whether now is a good time to scoop up some shares.

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Surging demand Cybersecurity is becoming increasingly important for enterprises and other large organization seeking to secure data due to the threat posed by automated AI bots. Hackers using AI are becoming increasingly capable, meaning enterprises need to stay extra secure with their digital data.

This is where Palo Alto Networks steps in. It is one of the leading cybersecurity firms, providing solutions including automated firewalls, cloud security, threat detection, and threat intelligence. Last quarter, annual recurring revenue (ARR) for its next-generation solutions reached $9.1 billion, up 63% year-over-year, driven by contracts to protect from AI. Remaining performance obligations grew 34% to $21.2 billion.

Momentum into the quarter drove Palo Alto Networks' stock to a record high. Where it faltered this week was guidance for fiscal year 2027, which calls for total revenue growth of 23%-24%. Investors were likely hoping for more growth given the intense expectations surrounding the AI narrative.

Image source: Getty Images.

Should you buy Palo Alto Networks stock? Despite giving up these August gains, Palo Alto Networks stock has still been a huge winner in the last few years, and it trades at a premium valuation.

On a price-to-sales ratio (P/S), it trades at a valuation of 22. That is significantly higher than the S&P 500 Index average of 3.8, which is also at a record high. Expectations could not be higher for Palo Alto Networks.

It generates a healthy amount of free cash flow, but this is clouded by its heavy reliance on stock-based compensation, with shares outstanding up 48% over the last 10 years. In order to be a buyer of Palo Alto Networks stock today, you need to believe in two things. First, that revenue growth will stay above 20% for many years in the future. Second, that its GAAP (generally accepted accounting principles) operating margin will expand significantly from here.

If you don't believe these things, the stock is likely not a good bet at a P/S ratio of 22.

watch now

Palo Alto Networks CEO Nikesh Arora said Tuesday that AI is forcing companies to overhaul roughly $1 trillion of aging cybersecurity infrastructure built for a pre-AI world.

"Nothing that was deployed seven or 10 years ago is prepared or ready to handle AI at machine speed," Arora told CNBC's Jim Cramer on "Mad Money." "You have to rethink your cyber architecture."

Palo Alto's earnings report on Tuesday suggests that urgency is already translating into business. The company beat fiscal fourth quarter estimates and issued a strong outlook for its new fiscal year. Cramer's Charitable Trust, the portfolio run by the CNBC Investing Club, owns Palo Alto and cyber peer CrowdStrike.

Arora expects the opportunity to grow as AI allows attackers to find and exploit vulnerabilities faster than ever before, forcing companies to modernize security defenses that weren't designed for automated threats. "You cannot deploy AI successfully if you don't get cybersecurity right," he said.

"There's approximately $1 trillion of global cybersecurity debt that must be modernized to defend against automated threats because they operate instantaneously," Arora said on Palo Alto's earnings call.

That opportunity marks a dramatic reversal from how investors viewed AI's impact on cybersecurity earlier this year. Palo Alto and other cybersecurity stocks came under pressure on fears that increasingly capable AI models could disrupt traditional security software. Eventually, the market began to view AI as a growth driver as investors recognized that attackers can weaponize the same technology.

"Nine months ago, ... we were guilty and convicted of near death because AI was going to eat our lunch, breakfast, and dinner," Arora told Cramer. "It seems like that's not the case. It seems like we're going to have to have the feast with them."

Arora pointed to the emergence of Anthropic's Mythos model earlier this year as a turning point. Mythos prompted companies to take cybersecurity more seriously because the model could be easily used to exploit software vulnerabilities. Shares of Palo Alto have surged 113% since April 7. Prior to that point, the stock was in the red for 2026.

"I've been trying for eight years to tell customers they're not ready, and [Anthropic CEO Dario Amodei] did it in one event, just by launching Mythos," Arora said on CNBC.

Arora said Palo Alto has held conversations with roughly 2,000 companies about its Frontier AI Critical Defense Program, which uses advanced AI models to test customers' defenses, identify vulnerabilities, and help them modernize their security infrastructure. The company formally introduced the initiative in August.

While Arora cautioned that the spending won't materialize all at once, he said AI has fundamentally expanded the size and duration of the opportunity for the cybersecurity industry.

"Not everything's going to happen next quarter," Arora told Cramer. "But all I say is this changes the long-term growth rate and duration of cybersecurity, not just for Palo Alto, but as an industry."

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Live 4 updates · Last at 4:44pm ET Updates appear automatically.

By Thomas Richmond · Updated Sep 1, 4:44pm ET · Published Sep 1, 2:35pm ET

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That wraps up our initial coverage of Palo Alto’s Q4 results. Thank you for stopping by!

Palo Alto Networks just reported earnings with shares initially up 6% following the report. Here are the key numbers:

Revenue: $3.41 billion vs. $3.35 billion expected Adjusted EPS: $1.02 vs. $0.98 expected NGS ARR: $9.10 billion, up 63% year over year Free Cash Flow: $1.3 billion Guidance:

Q1 Revenue: $3.30 billion to $3.31 billion vs. $3.22 billion expected Q1 EPS: $0.96 to $0.98 FY27 Revenue: $14.10 billion to $14.20 billion vs. $13.83 billion expected FY27 EPS: $4.16 to $4.19 Quick Read:

Beat-and-raise across the board: Palo Alto topped Q4 revenue and EPS estimates while both Q1 and full-year revenue guidance came in ahead of Wall Street expectations. NGS growth is the standout: NGS ARR surged 63% to $9.10 billion, with nearly $1 billion of net new ARR added during Q4, reinforcing the company’s AI and platformization growth story.

Consensus for Q4 sits at on in revenue, essentially matching management’s own range. The real event is the first FY27 outlook.

Wall Street currently models in FY27 revenue, with EPS estimates trimmed to from ninety days ago on .

CEO Nikesh Arora has beaten and raised for five straight quarters, so a conservative guide is baked in.

Bullish scenario: FY27 revenue above $14B, NGS ARR growth above 40%, and FCF margin tracking toward the target early.

Bearish scenario: revenue below $13.5B, Q1 EPS under consensus, or FCF margin stalling at . With shares already off intraday, the guide dictates the next leg.

Palo Alto Networks reports Q4 FY26 earnings after the bell, with Wall Street focused on $3.35 billion in revenue and adjusted EPS guidance of $0.96-$0.98.

The bigger number may be Next-Generation Security ARR. Management guided for $8.90 billion to $8.95 billion, representing 59-60% growth, with investors watching closely for CyberArk’s contribution.

Expectations are high. Palo Alto shares have roughly doubled year to date as investors bet on platformization, AI security demand, and a longer-term path toward 40% free cash flow margins. Yet each of the company’s last three earnings beats was followed by a negative day-of stock reaction.

A clean beat and strong FY27 outlook could validate the rally. Any softness in NGS ARR or cautious forward guidance could quickly put the stock’s premium valuation under pressure.

This article is updated throughout the trading day. Check back for more.

Full CoverageThe story so far

Palo Alto Networks (NASDAQ:PANW | PANW Price Prediction) reports fiscal Q4 2026 results today at 4:05 PM ET. Shares have climbed 89.18% year to date, but the stock is down 5.67% intraday.

Momentum Meets a Premium Setup Q3 delivered revenue of $3.002 billion, up 31.15% year over year, and non-GAAP EPS of $0.85, beating by 6.65% and extending the streak to five quarters.

NGS ARR reached $8.13 billion, up 60%, while trailing 12-month adjusted free cash flow margin ran at 38.5%, a 430 basis point improvement. CEO Nikesh Arora called Q3 “a record quarter,” citing accelerating organic bookings as customers race to secure AI deployments. Shares now trade at $359.66 against a forward P/E of 93, so high expectations are already priced in.

Consensus Estimates Metric Q4 FY26 Estimate YoY Change FY26 Estimate FY27 Estimate Revenue $3.35B +32% $11.42B $13.84B EPS (Non-GAAP) $0.9777 +10% $3.7754 $1.9418 Revisions skew sharply positive, with 40 upward Q4 EPS revisions in the trailing 30 days against one downward. FY27 EPS, however, has been reset from $2.33 ninety days ago to $1.94 as acquisition dilution flows through models.

What I’m Watching Tonight: NGS ARR, AI Security Traction, and FY27 Framing Tonight, I’ll be watching whether NGS ARR lands inside guidance, and how much came from organic growth versus acquisitions. Q3 organic NGS ARR grew 28% against the 60% reported figure, so the split shapes the growth narrative.

I’ll be tracking Prisma AIRS after customer count expanded to more than 300 in Q3 from 100 at the end of Q2, with $100 million ARR in sight. XIM ended Q3 at $600 million ARR across 740 customers, validating the AI security thesis.

Analysts will also focus on CyberArk profitability convergence, which management said is running 3-6 months ahead of the original 12-18 month timeline. The path to 40% adjusted FCF margin by FY28 hinges on that work.

Management also flagged FY27 segment disclosures across Network Security, Cortex, and Identity. Initial FY27 framing will reset the debate. Rising memory and storage costs, plus $517 million in Q3 share-based compensation, are also items to watch.

Earnings History Table Quarter EPS Surprise Day-of Move 1-Week Move 30-Day Move Q3 FY26 +6.65% -5.64% -6.14% +20.19% Q2 FY26 +9.70% -6.82% -4.93% +6.96% Q1 FY26 +4.35% -7.42% +2.73% +1.65% Q4 FY25 +6.74% +3.06% +1.47% +14.67% On average, shares moved -1.14% one week after earnings over the past year.

Contact [email protected] for any questions or corrections.

Thomas Richmond

Thomas Richmond is a financial writer and content strategist with 5+ years of experience covering stocks and financial markets. He has published over 250 articles focused on individual stock analysis, helping investors better understand business fundamentals, stock valuations, and long-term opportunities.

Thomas previously served as a Content Lead at TIKR, a stock research platform, where he helped scale the company’s blog to hundreds of articles per month and contributed to a weekly newsletter reaching more than 100,000 investors.

He specializes in breaking down complex companies into clear, actionable insights for everyday investors, with a focus on fundamentals-driven research.

His work has also been featured on platforms including Seeking Alpha and Sure Dividend.

Outside of work, Thomas enjoys weight lifting and soccer.

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Palo Alto Networks Inc. (NASDAQ:PANW) shares are dipping Tuesday as software stocks broadly pull back amid rising bond yields and oil prices, with the company also set to report fourth-quarter results after today’s market close.

Palo Alto Networks shares are retreating from recent levels. Why are PANW shares down? Rising Yields and Oil Prices Weigh On Software StocksBond markets sent the 10-year Treasury yield to 4.80% Tuesday, its highest level since January 2025, while the 30-year climbed to 5.25%, despite the Treasury Department’s move back in August to double its long-dated bond buybacks in an effort to keep a lid on borrowing costs. That step hasn’t been enough to counter inflation running hotter than the Fed’s target alongside a widening federal deficit, with total U.S. debt now above $40 trillion.

Oil added to the pressure too, with Brent up more than 4% and WTI gaining nearly 3% after Iran’s president said Tehran would respond if the U.S. upholds a temporary agreement signed in June, following the first direct military exchange between the two countries since late July. Rising yields tend to hit software and other growth stocks especially hard, since more expensive borrowing makes investors place less value today on profits companies expect to earn further into the future.

Palo Alto Set to Report Fourth-Quarter Results After the CloseWall Street is looking for Palo Alto to post $3.35 billion in fourth-quarter sales, a jump from the $2.54 billion it brought in during the same period last year, alongside earnings of 98 cents per share versus 95 cents a year earlier. The cybersecurity company has cleared revenue expectations for 11 consecutive quarters running and profit targets in eight of its last ten, and simply matching those numbers tonight would push the company past its own third-quarter revenue mark of $3 billion into new record territory.

If Palo Alto clears those marks tonight, it would reinforce the idea that enterprise demand for cybersecurity, and specifically for AI-related security tools, remains resilient even as broader markets grapple with higher rates and macro uncertainty. A strong beat could also help push the stock back toward its all-time high, something the company is explicitly aiming for with this report.

Palo Alto Posted Accelerating Growth Last QuarterThat upcoming report follows a strong third-quarter showing. For the period ended April 30, Palo Alto’s top line climbed 31% from a year earlier to $3 billion, with $388 million of that boost coming from its recent purchases of CyberArk and Chronosphere.

Chairman and CEO Nikesh Arora described the quarter as “a standout quarter for Palo Alto Networks,” crediting faster organic booking growth to enterprises increasingly leaning on Palo Alto to protect their AI rollouts at scale. He argued that breakthroughs happening at the cutting edge of AI have made cybersecurity a more urgent priority industrywide and are fundamentally altering how the sector will look in years ahead.

Adjusted net income for the quarter came in at $684 million, or 85 cents per diluted share. Adjusted free cash flow reached $910 million for the quarter, and trailing 12-month adjusted free cash flow margin improved to 38.5%. For the fourth quarter, Palo Alto had guided to revenue roughly between $3.35 billion and $3.36 billion, Next-Generation Security ARR of $8.90 billion to $8.95 billion, and adjusted earnings between 96 cents and 98 cents per diluted share.

PANW Shares Are FallingPANW Price Action: Palo Alto shares were down 6.09% at $358.84 at the time of publication on Tuesday, according to Benzinga Pro.

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Palo Alto Networks Inc. (NASDAQ:PANW) shares are in the spotlight, with earnings on deck, recent analyst activity and Edge Rankings all drawing attention.

Palo Alto Networks stock is trading near recent highs. What’s next for PANW stock? Earnings Preview & HistoryPalo Alto is scheduled to report fourth-quarter fiscal-year 2026 earnings on September 1 after the market closes. Analysts estimate earnings per share of 98 cents and revenue of $3.35 billion. For the prior quarter, Palo Alto reported earnings per share of 85 cents, beating the consensus estimate of 80 cents. It reported revenue of $3.00 billion, beating the consensus estimate of $2.94 billion.

What to Watch – ARR Targets, Acquisition Execution, Prisma AIRS, China ReviewInvestors will be closely tracking Next-Generation Security ARR, which management guided to $8.90 billion to $8.95 billion for the quarter, representing 59% to 60% year-over-year growth, along with color on organic versus acquired growth following the CyberArk and Chronosphere acquisitions. Integration execution will also be in focus, particularly management’s claim that CyberArk profitability will converge with Palo Alto’s core business three to six months ahead of schedule, alongside acquisition-related costs, which jumped to $113 million last quarter from just $5 million the quarter before.

Prisma AIRS momentum should draw additional attention, given management has called it the fastest-growing product in company history with a clear line of sight to $100 million in annual recurring revenue, along with any commentary on the recently launched Chinese government cybersecurity review of Palo Alto’s products.

Analyst Consensus & Recent Actions The stock carries a Buy rating with an average price forecast of $384.67. Recent analyst moves include:

Jefferies: Buy (Raises Target to $450.00) (Aug. 28) BTIG: Buy (Maintains Target to $380.00) (Aug. 26) JP Morgan: Overweight (Raises Target to $384.00) (Aug. 25) Benzinga Edge RankingsBelow is the Benzinga Edge scorecard for Palo Alto Networks, highlighting its strengths and weaknesses compared to the broader market:

Momentum: Bullish (Score: 97.81) — The stock is screening as a market leader on trend, even if premarket trade is softer. Value: Weak (Score: 3.04) — The score reflects a premium setup, which can make the stock more sensitive to earnings and guidance. Growth: Strong (Score: 76.52) — The market is still rewarding the company’s growth profile versus the broader universe. The Verdict: Palo Alto’s Benzinga Edge signal reveals a classic High-Flyer setup, with very strong momentum and growth but a weak value profile. That mix can work well when the tape is supportive, but it also raises the bar for the upcoming earnings report to keep the trend intact.

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Palo Alto Shares Trade FlatPANW Price Action: At the time of publication, Palo Alto shares are trading 0.56% lower at $369.50, according to data from Benzinga Pro.

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Key Takeaways
Palo Alto Networks is set to report earnings Tuesday afternoon, with the cybersecurity stock seen potentially rising to a fresh record following the results.The company is projected to report a more than 30% jump in revenue from a year earlier.

Palo Alto Networks is scheduled to report earnings after the closing bell Tuesday, with the cybersecurity stock seen potentially climbing to a fresh high in the days that follow.1

Current options pricing suggests traders expect Palo Alto Networks (PANW) shares could swing up to 8.5% in either direction by the end of the week following the results. A move of that size from Friday afternoon’s level around $370 could see the shares rally as high as $402, topping a record set earlier this month, or drag them below $339.

Palo Alto Networks shares have roughly doubled in value since the start of the year, as worries about AI disrupting the cybersecurity software space have eased. Palo Alto Networks shares hit a record high earlier this month, as a series of AI-related hacks added fuel to expectations that developments in AI would drive spending on cybersecurity.

Why This Matters to Investors
A solid report from Palo Alto Networks could further improve sentiment around the cybersecurity sector.

Earlier this month, UBS analysts lifted their price target for the stock to $390 from $300, but warned Palo Alto Networks could face a more challenging setup to impress after the stock’s big rally over the last several months.2 Expectations are also running high after stronger-than-anticipated earnings from rival CrowdStrike (CRWD).

Palo Alto Networks is projected to report fiscal fourth-quarter revenue of $3.35 billion, a more than 30% rise year-over-year, with adjusted earnings of 98 cents per share, up 3 cents from the same time last year, per Visible Alpha estimates.

Analysts are mostly bullish on Palo Alto Networks, with nine of the 12 analysts tracked by Visible Alpha holding “buy” recommendations, compared to three neutral ratings. Their mean target of $374 would suggest just a 1% rise from the stock’s recent level, however, after its torrid rally.

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TOKYO & LONDON & SANTA CLARA, Calif.--(BUSINESS WIRE)--NTT DATA, a global leader in AI, digital business and technology services, and Palo Alto Networks (NASDAQ: PANW) today announced a multi-year strategic alliance designed to help organizations securely adopt AI, modernize cybersecurity, simplify complex technology environments and build cyber resilience for the AI era.

As Palo Alto Networks first strategic alliance of this kind with a global systems integrator, the agreement, which targets $1 billion in joint business by the end of three years (2029), combines Palo Alto Networks AI-powered cybersecurity platforms with NTT DATA's consulting, engineering and managed services.

Leveraging joint engineering, co-innovation and coordinated global delivery, the alliance will help clients assess cyber risk, deploy AI securely and continuously optimize security. Through these joint solutions, clients will gain a unified approach that seamlessly spans cybersecurity strategy, implementation and managed services.

Building on the companies’ Frontier AI collaboration, the alliance brings together Palo Alto Networks Unit 42® threat intelligence with NTT DATA’s global cybersecurity expertise, AI governance and managed services. Backed by joint investments, more than 2,000 certified experts as well as dedicated Forward Deployed Engineers, the alliance will deliver a seamless approach to streamline deployments and speed client outcomes. Through direct engineering collaboration, NTT DATA will gain early access to new platform features, further accelerating the delivery of AI security services to clients.

Initial solutions will address the most pressing cybersecurity challenges facing clients in highly regulated and critical industries, including financial services, healthcare, manufacturing and the public sector, across six strategic transformation areas:

Autonomous Security Operations Center (SOC) – Modernize security operations with Agentic AI and managed services that help organizations detect, investigate and respond faster to increasingly sophisticated, machine-speed cyber threats while reducing operational complexity. AI governance – Embed governance, security and risk management throughout the AI lifecycle, helping organizations manage emerging AI risks and confidently scale AI innovation with greater accountability, transparency and control. Identity security – Protect human, machine and AI agent identities, including workloads and devices, through an Identity Security Framework designed to discover, manage, secure and govern identities across the enterprise. Zero Trust & SASE – Helps secure users, applications and data across an increasingly complex attack surface through a unified Zero trust and secure edge architecture, leveraging AI-driven threat detection and prevention. Resilient cloud – Enables organizations to improve visibility, compliance and autonomous risk reduction across multi-cloud environments with AI-enabled security posture management and stronger governance. Firewall modernization – Modernize firewall environments to reduce complexity, improve visibility and strengthen enterprise security. “AI is reshaping both business and cybersecurity, making deep ecosystem collaboration more important than ever," said Nikesh Arora, Chairman and Chief Executive Officer, Palo Alto Networks. "Expanding our alliance with NTT DATA allows us to operationalize platformization at true global scale, helping enterprises eliminate legacy complexity and move fast without sacrificing safety."

"AI is redefining every aspect of the enterprise, but it is also transforming the threat landscape at unprecedented speed. Organizations need a new approach to cyber resilience that combines AI-driven security, deep industry expertise and global scale,” said Abhijit Dubey, Chief Executive Officer and Chief AI Officer, NTT DATA, Inc. "Together with Palo Alto Networks, we're bringing AI-powered cybersecurity innovation together with NTT DATA’s consulting, engineering and managed services capabilities to help clients securely accelerate AI adoption and stay ahead of evolving threats.”

NTT DATA brings world-class cybersecurity expertise to the collaboration, backed by over 7,500 cybersecurity professionals, 70+ delivery centers and 20+ Cyber Defense Centers. Paired with Palo Alto Networks AI-powered platforms and Unit 42 threat intelligence, the alliance delivers the technology, expertise and global reach enterprise organizations need to securely deploy AI across complex environments.

About NTT DATA

Fortune Global 100. We are committed to accelerating client success and positively impacting society through responsible innovation. We are one of the world’s leading AI and digital infrastructure providers, with unmatched capabilities in enterprise-scale AI, cloud, security, connectivity, data centers and application services. Our consulting and industry solutions help organizations and society move confidently and sustainably into the digital future. As a Global Top Employer, we have experts in more than 70 countries. We also offer clients access to a robust ecosystem of innovation centers as well as established and start-up partners. NTT DATA is part of NTT Group, which invests over $3 billion each year in R&D. Visit us at nttdata.com

About Palo Alto Networks

Palo Alto Networks (NASDAQ: PANW), the global AI cybersecurity leader, protects our digital way of life with a comprehensive portfolio of cybersecurity solutions and platforms across Network, Cloud, Security Operations, AI and Identity. Trusted by 70,000+ customers and powered by Unit 42 threat intelligence, our AI-driven platforms eliminate complexity, empowering enterprises to modernize with confidence and securing the speed of innovation. Explore the future of security at www.paloaltonetworks.com.

Palo Alto Networks, Unit 42, and the Palo Alto Networks logo are registered trademarks of Palo Alto Networks, Inc. in the United States or in jurisdictions throughout the world. All other trademarks, trade names, or service marks used or mentioned herein belong to their respective owners.

Forward-Looking Statements

This release contains forward-looking statements that involve risks, uncertainties and assumptions, including, without limitation, statements regarding the benefits, impact, or performance or potential benefits, impact or performance of our products and technologies or future products and technologies. These forward-looking statements are not guarantees of future performance, and there are a significant number of factors that could cause actual results to differ materially from statements made in this release. We identify certain important risks and uncertainties that could affect our results and performance in our most recent Annual Report on Form 10-K, our most recent Quarterly Report on Form 10-Q, and our other filings with the U.S. Securities and Exchange Commission from time-to-time, each of which are available on our website at investors.paloaltonetworks.com and on the SEC's website at www.sec.gov. All forward-looking statements in this release are based on information available to us as of the date hereof, and we do not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made.

A collaboration of leading technology providers to protect critical infrastructure against the rapid rise of AI-discovered vulnerabilities

, /PRNewswire/ -- Palo Alto Networks (NASDAQ: PANW) today announced the Frontier AI Critical Defense Program, a first-of-its-kind initiative to protect critical infrastructure from AI-driven exploits. Through the program, leaders across operational technology (OT), healthcare, commercial software and open-source communities coordinate with Palo Alto Networks to deploy proactive "virtual patches," neutralizing vulnerabilities at the network-level before attackers can exploit them.

Palo Alto Networks recently used Frontier AI models to uncover more than 14,000 previously unknown vulnerabilities in open source software, underscoring how AI could enable threat actors to automate cyberattacks and shrink attack timelines. Yet, critical infrastructure operators, constrained by strict uptime and safety testing, cannot patch at AI speed. This mismatch creates a significant exposure gap, leaving essential systems vulnerable long before software fixes can be safely deployed.

True defense at AI speed requires joint action. This program builds on our existing collaborations with IBM and Red Hat (as part of Lightwell), Microsoft (as part of MAPP) and OT leaders like Siemens and the Idaho National Laboratory (as part of the OT Threat Research Lab).

Today, the collaboration is expanding to include Anthropic, OpenAI, OT leaders like Mitsubishi and Axis Communications, industry consortiums for sharing risk information like Analysis and Resilience Center for Systemic Risk and Health-ISAC, OT research organizations like the independent, non-profit Energy R&D Institute (EPRI) and OSS initiatives like Akrites (an initiative from the Linux Foundation).

Palo Alto Networks Frontier Virtual Patching puts these insights into action to deliver proactive protection for joint customers. By combining Frontier AI threat discovery with trusted vulnerability intelligence, it delivers rapid network-level patches while safeguarding sensitive vulnerability details from attackers.

Lee Klarich, Chief Product Officer, Palo Alto Networks
"In the age of Frontier AI, the traditional, reactive race to build and deploy software patches before adversaries exploit a flaw is a losing battle. Protecting critical infrastructure requires a structural shift from isolated patching to collective, proactive intelligence. Through initiatives like our Frontier AI Critical Defense Program, we can neutralize threats at the network layer before they are weaponized."

Help safeguard critical infrastructure by joining the expanding Frontier AI Critical Defense Program, today. Visit the website to learn more on how to get involved, or explore Palo Alto Networks broader Frontier AI Defense Initiative.

About Palo Alto Networks
Palo Alto Networks (NASDAQ: PANW), the global AI cybersecurity leader, protects our digital way of life with a comprehensive portfolio of cybersecurity solutions and platforms across Network, Cloud, Security Operations, AI and Identity. Trusted by 70,000+ customers and powered by Unit 42 threat intelligence, our AI-driven platforms eliminate complexity, empowering enterprises to modernize with confidence and securing the speed of innovation. Explore the future of security at www.paloaltonetworks.com.

Forward-Looking Statements
This release contains forward-looking statements with respect to Palo Alto Networks that involve risks, uncertainties and assumptions, including, without limitation, statements regarding the benefits, impact, or performance or potential benefits, impact or performance of Palo Alto Networks products, technologies, and integrations or future products, technologies, and integrations. These forward-looking statements are not guarantees of future performance, and there are a significant number of factors that could cause actual results to differ materially from statements made in this release. Palo Alto Networks identifies certain important risks and uncertainties that could affect its results and performance in its most recent Annual Report on Form 10-K, its most recent Quarterly Report on Form 10-Q, and its other filings with the Securities and Exchange Commission from time-to-time, each of which are available on Palo Alto Networks' website at investors.paloaltonetworks.com and on the SEC's website at www.sec.gov.  All forward-looking statements in this release regarding Palo Alto Networks are based on information available to Palo Alto Networks as of the date hereof, and Palo Alto Networks does not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made.

SOURCE Palo Alto Networks, Inc.

A year ago, cybersecurity company Palo Alto Networks (PANW +1.22%) carried a market value of about $113 billion. As of this writing, it stands near $295 billion. That's a gain of more than 150% in 12 months, leaving shares within about 4% of their 52-week high. The climb spans the whole year, with the stock's 52-week range running from $139.57 to $376.98.

A move like that usually means the business transformed. And Palo Alto's business has changed. It bought identity-security company CyberArk and observability company Chronosphere, and management says demand for securing artificial intelligence (AI) deployments is accelerating its bookings.

But revenue was guided to grow about 24% in fiscal 2026, a year that ended July 31 -- and a decent chunk of that growth was acquired. The company's market value grew about six times faster.

So what changed enough to justify nearly tripling the company's value in a year? Less than the stock price implies, I'd argue.

Image source: Getty Images.

The quarter behind the rerating Palo Alto's fiscal third quarter (the period ended April 30) was strong. Revenue rose 31% year over year to $3.0 billion, up from $2.3 billion, though $388 million of it came from the newly acquired CyberArk and Chronosphere. Strip those out, and revenue grew about 14%. That's solid for a company this size, but it isn't triple-the-value growth.

The faster-growing line is next-generation security annual recurring revenue (ARR), the annualized value of subscriptions to the company's newer security products. That figure reached $8.1 billion, up 60% year over year. The acquisitions contributed $1.6 billion of it, and excluding them, growth was still 28% from about $5.1 billion a year earlier. Management expects $8.90 billion to $8.95 billion by fiscal year-end, and remaining performance obligations climbed 36% to $18.4 billion.

However you slice those numbers, the newer product lines keep growing quickly while the legacy firewall business matures.

"Q3 was a standout quarter for Palo Alto Networks, with accelerating organic bookings growth as customers turn to us to secure their AI deployments at scale," CEO Nikesh Arora said in the earnings release.

Profitability is more complicated. On a non-GAAP (adjusted) basis, earnings per share rose 6% year over year to $0.85. Under generally accepted accounting principles (GAAP), the company swung to a $177 million quarterly loss from a $262 million year-ago profit in a quarter that absorbed the two acquisitions. And management says it remains on track for a 40% adjusted free cash flow margin in fiscal 2028.

So the business is bigger, growing steadily, and executing on a huge acquisition. All true. But none of it is two and a half times better than it was a year ago.

Today's Change

(

1.22

%) $

4.37

Current Price

$

363.86

What the price now assumes The bulk of the stock's gain came from investors paying more for each dollar of earnings. At about $362 per share, the stock trades at roughly 96 times the midpoint of management's own adjusted earnings-per-share guidance of $3.77 to $3.79 for fiscal 2026. For comparison, adjusted earnings per share grew 6% last quarter.

A multiple like that assumes the AI-security opportunity turns Palo Alto into a much larger, much more profitable company -- and that the CyberArk integration goes smoothly while it happens. It could work out that way. Of course, the company has absorbed acquisitions well in the past, and security spending tends to hold up even when budgets tighten. That's arguably the strongest part of the bull case.

But the bar for the next report is already set: When Palo Alto reports fiscal fourth-quarter and full-year results on Sept. 1, management's own targets call for quarterly revenue of about $3.35 billion, up 32% year over year, and next-generation security ARR near $8.9 billion. Meeting those numbers keeps the story intact. It doesn't make the stock cheaper.

I think Palo Alto Networks is one of the best businesses in cybersecurity, and its AI-security position looks stronger after the CyberArk deal, not weaker. At half the valuation, I'd be interested. At 96 times this year's expected adjusted earnings, though, years of excellent execution look priced in already, and the growth backing that up is good rather than extraordinary.

Could the company grow into this valuation? Sure, over enough years. But the stock's near-tripling did most of its work through the multiple investors are paying, and multiples can compress a lot faster than earnings compound.

Aureus Asset Management LLC grew its stake in shares of Palo Alto Networks, Inc. (NASDAQ:PANW – Free Report) by 267.0% in the first quarter, according to the company in its most recent 13F filing with the Securities and Exchange Commission. The firm owned 8,404 shares of the network technology company’s stock after acquiring an additional 6,114 shares during the period. Aureus Asset Management LLC’s holdings in Palo Alto Networks were worth $1,347,000 at the end of the most recent reporting period.

A number of other institutional investors and hedge funds have also modified their holdings of the company. Norges Bank acquired a new position in shares of Palo Alto Networks during the 4th quarter worth $1,415,364,000. Vanguard Group Inc. lifted its stake in Palo Alto Networks by 4.1% in the 4th quarter. Vanguard Group Inc. now owns 67,929,063 shares of the network technology company’s stock valued at $12,512,533,000 after buying an additional 2,659,100 shares in the last quarter. Harel Insurance Investments & Financial Services Ltd. lifted its stake in Palo Alto Networks by 1,665.1% in the 1st quarter. Harel Insurance Investments & Financial Services Ltd. now owns 2,761,909 shares of the network technology company’s stock valued at $442,788,000 after buying an additional 2,605,433 shares in the last quarter. Bank of America Corp DE grew its holdings in Palo Alto Networks by 11.9% during the 4th quarter. Bank of America Corp DE now owns 19,375,486 shares of the network technology company’s stock valued at $3,568,964,000 after buying an additional 2,065,776 shares during the last quarter. Finally, Employees Provident Fund Board acquired a new stake in Palo Alto Networks during the 4th quarter valued at $281,542,000. Institutional investors and hedge funds own 79.82% of the company’s stock.

Wall Street Analysts Forecast Growth A number of equities analysts have recently weighed in on PANW shares. Weiss Ratings cut Palo Alto Networks from a “hold (c)” rating to a “hold (c-)” rating in a report on Thursday, June 4th. The Goldman Sachs Group reaffirmed a “buy” rating and set a $330.00 price objective on shares of Palo Alto Networks in a research note on Wednesday, June 3rd. Wedbush lifted their price objective on Palo Alto Networks from $300.00 to $340.00 and gave the stock an “outperform” rating in a research report on Wednesday, June 3rd. Loop Capital boosted their target price on shares of Palo Alto Networks from $160.00 to $290.00 and gave the company a “hold” rating in a research note on Wednesday, June 3rd. Finally, Mizuho upped their target price on shares of Palo Alto Networks from $265.00 to $305.00 and gave the company an “outperform” rating in a report on Wednesday, June 3rd. One equities research analyst has rated the stock with a Strong Buy rating, forty have assigned a Buy rating, seven have issued a Hold rating and one has assigned a Sell rating to the company’s stock. According to MarketBeat.com, the company currently has an average rating of “Moderate Buy” and an average target price of $331.48.

Read Our Latest Report on PANW

Insider Buying and Selling at Palo Alto Networks In related news, EVP Dipak Golechha sold 5,000 shares of the company’s stock in a transaction on Tuesday, June 23rd. The shares were sold at an average price of $289.56, for a total transaction of $1,447,800.00. Following the completion of the sale, the executive vice president directly owned 145,250 shares of the company’s stock, valued at approximately $42,058,590. This represents a 3.33% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through the SEC website. Also, Director James J. Goetz sold 20,000 shares of the stock in a transaction on Friday, June 12th. The shares were sold at an average price of $279.90, for a total value of $5,598,000.00. Following the completion of the sale, the director owned 20,000 shares of the company’s stock, valued at approximately $5,598,000. This represents a 50.00% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. In the last three months, insiders have sold 101,239 shares of company stock worth $27,174,360. Corporate insiders own 1.40% of the company’s stock.

Key Headlines Impacting Palo Alto Networks Here are the key news stories impacting Palo Alto Networks this week:

Positive Sentiment: Analysts and commentators continue to highlight Palo Alto Networks as a key beneficiary of rising AI-driven cybersecurity spending, with Morgan Stanley saying sentiment on software stocks may be too negative and Barron’s arguing PANW could be a major winner in the new AI era. Article: Morgan Stanley Analysts Say Sentiment Has Gotten ‘Too Negative’ on Software Stocks. These Are Their Picks Positive Sentiment: Market watchers are also pointing to broader enterprise demand for cybersecurity as AI agents proliferate, which could support future security product spending and reinforce PANW’s growth narrative. Article: Citi Wealth CIO Warns “Infinite AI Agents” Will Accelerate Cybersecurity’s Share of Enterprise Spending Positive Sentiment: Palo Alto Networks announced it will acquire Embrace to extend its observability platform with Real User Monitoring and Synthetics, a move aimed at improving digital experience monitoring and AI-driven operations. Investors may see this as an expansion into a higher-value adjacent market. Article: Palo Alto Networks to Extend Leading Observability Platform with Innovative Digital Experience Monitoring Neutral Sentiment: Another brief note flagged PANW as a cybersecurity stock to follow, but did not add any new catalyst beyond the broader sector interest. Article: Cybersecurity Stocks To Follow Now – July 20th Negative Sentiment: Despite the upbeat long-term themes, one article noted PANW had slipped intraday, suggesting some investors are still taking profits or reacting to overall software sector weakness. Article: Palo Alto slips 3%: Why this analyst still sees it as a top cyber pick Palo Alto Networks Trading Down 2.0% PANW stock opened at $335.28 on Thursday. The company has a quick ratio of 0.86, a current ratio of 0.86 and a debt-to-equity ratio of 0.04. The company has a market cap of $273.25 billion, a price-to-earnings ratio of 274.82, a PEG ratio of 12.70 and a beta of 0.91. The business has a fifty day simple moving average of $297.43 and a 200-day simple moving average of $215.80. Palo Alto Networks, Inc. has a 52 week low of $139.57 and a 52 week high of $368.80.

Palo Alto Networks (NASDAQ:PANW – Get Free Report) last issued its earnings results on Tuesday, June 2nd. The network technology company reported $0.85 earnings per share for the quarter, beating analysts’ consensus estimates of $0.79 by $0.06. The firm had revenue of $3 billion for the quarter, compared to analysts’ expectations of $2.94 billion. Palo Alto Networks had a return on equity of 10.53% and a net margin of 7.95%.The firm’s revenue for the quarter was up 31.1% compared to the same quarter last year. During the same quarter last year, the firm earned $0.37 earnings per share. Palo Alto Networks has set its FY 2026 guidance at 3.770-3.790 EPS and its Q4 2026 guidance at 0.960-0.980 EPS. On average, equities research analysts expect that Palo Alto Networks, Inc. will post 2.03 EPS for the current year.

Palo Alto Networks Company Profile (Free Report)

Palo Alto Networks (NASDAQ: PANW) is a cybersecurity company founded in 2005 and headquartered in Santa Clara, California. The firm develops a broad suite of security products and services designed to prevent successful cyberattacks and protect enterprise networks, clouds, and endpoints. Built around a platform strategy, its offerings target threat prevention, detection, response and governance across hybrid and multi-cloud environments.

The company’s product portfolio includes next‑generation firewalls as a core on‑premises capability, alongside cloud‑delivered security services and software for securing public and private clouds.

See Also Five stocks we like better than Palo Alto Networks Could Truth API Become Trump Media’s First Meaningful Revenue Driver? Small Caps Are Crushing the S&P 500—3 Stocks Still Worth Buying Moog Is More Than a Missile Maker, and Wall Street Is Noticing A Boring Dividend Growth Strategy Becomes a Solid Defensive Play Want to see what other hedge funds are holding PANW? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Palo Alto Networks, Inc. (NASDAQ:PANW – Free Report).

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Posted by Defense World Staff on Jul 23rd, 2026

Alamar Capital Management LLC purchased a new position in shares of Palo Alto Networks, Inc. (NASDAQ:PANW – Free Report) during the first quarter, according to its most recent 13F filing with the SEC. The institutional investor purchased 12,209 shares of the network technology company’s stock, valued at approximately $1,957,000. Palo Alto Networks comprises approximately 1.2% of Alamar Capital Management LLC’s portfolio, making the stock its 28th largest position.

A number of other hedge funds and other institutional investors have also recently bought and sold shares of PANW. Janney Montgomery Scott LLC raised its position in shares of Palo Alto Networks by 15.0% during the first quarter. Janney Montgomery Scott LLC now owns 410,401 shares of the network technology company’s stock worth $65,796,000 after purchasing an additional 53,485 shares during the period. Aviva PLC lifted its holdings in shares of Palo Alto Networks by 5.4% during the 4th quarter. Aviva PLC now owns 568,804 shares of the network technology company’s stock valued at $104,774,000 after purchasing an additional 29,230 shares in the last quarter. Granite Islands Private Wealth LLC grew its position in shares of Palo Alto Networks by 43.6% in the 1st quarter. Granite Islands Private Wealth LLC now owns 15,342 shares of the network technology company’s stock valued at $2,453,000 after purchasing an additional 4,659 shares during the period. Peapack Gladstone Financial Corp grew its position in shares of Palo Alto Networks by 8.8% in the 4th quarter. Peapack Gladstone Financial Corp now owns 48,458 shares of the network technology company’s stock valued at $8,926,000 after purchasing an additional 3,926 shares during the period. Finally, Oak Thistle LLC bought a new stake in Palo Alto Networks during the 4th quarter worth approximately $1,554,000. 79.82% of the stock is owned by institutional investors and hedge funds.

Palo Alto Networks Price Performance NASDAQ:PANW opened at $335.28 on Thursday. The company has a debt-to-equity ratio of 0.04, a quick ratio of 0.86 and a current ratio of 0.86. The stock’s 50-day simple moving average is $297.43 and its 200 day simple moving average is $215.80. The company has a market cap of $273.25 billion, a P/E ratio of 274.82, a P/E/G ratio of 12.70 and a beta of 0.91. Palo Alto Networks, Inc. has a 52-week low of $139.57 and a 52-week high of $368.80.

Palo Alto Networks (NASDAQ:PANW – Get Free Report) last issued its quarterly earnings results on Tuesday, June 2nd. The network technology company reported $0.85 EPS for the quarter, beating the consensus estimate of $0.79 by $0.06. The firm had revenue of $3 billion during the quarter, compared to analysts’ expectations of $2.94 billion. Palo Alto Networks had a return on equity of 10.53% and a net margin of 7.95%.The business’s quarterly revenue was up 31.1% compared to the same quarter last year. During the same period in the prior year, the firm posted $0.37 earnings per share. Palo Alto Networks has set its FY 2026 guidance at 3.770-3.790 EPS and its Q4 2026 guidance at 0.960-0.980 EPS. As a group, sell-side analysts forecast that Palo Alto Networks, Inc. will post 2.03 EPS for the current fiscal year.

Key Palo Alto Networks News Here are the key news stories impacting Palo Alto Networks this week:

Positive Sentiment: Analysts and commentators continue to highlight Palo Alto Networks as a key beneficiary of rising AI-driven cybersecurity spending, with Morgan Stanley saying sentiment on software stocks may be too negative and Barron’s arguing PANW could be a major winner in the new AI era. Article: Morgan Stanley Analysts Say Sentiment Has Gotten ‘Too Negative’ on Software Stocks. These Are Their Picks Positive Sentiment: Market watchers are also pointing to broader enterprise demand for cybersecurity as AI agents proliferate, which could support future security product spending and reinforce PANW’s growth narrative. Article: Citi Wealth CIO Warns “Infinite AI Agents” Will Accelerate Cybersecurity’s Share of Enterprise Spending Positive Sentiment: Palo Alto Networks announced it will acquire Embrace to extend its observability platform with Real User Monitoring and Synthetics, a move aimed at improving digital experience monitoring and AI-driven operations. Investors may see this as an expansion into a higher-value adjacent market. Article: Palo Alto Networks to Extend Leading Observability Platform with Innovative Digital Experience Monitoring Neutral Sentiment: Another brief note flagged PANW as a cybersecurity stock to follow, but did not add any new catalyst beyond the broader sector interest. Article: Cybersecurity Stocks To Follow Now – July 20th Negative Sentiment: Despite the upbeat long-term themes, one article noted PANW had slipped intraday, suggesting some investors are still taking profits or reacting to overall software sector weakness. Article: Palo Alto slips 3%: Why this analyst still sees it as a top cyber pick Insiders Place Their Bets In other Palo Alto Networks news, Director Helle Thorning-Schmidt sold 700 shares of the company’s stock in a transaction on Tuesday, July 7th. The shares were sold at an average price of $346.85, for a total value of $242,795.00. Following the transaction, the director directly owned 5,898 shares in the company, valued at $2,045,721.30. The trade was a 10.61% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at this hyperlink. Also, CAO Josh D. Paul sold 900 shares of the stock in a transaction dated Wednesday, July 1st. The shares were sold at an average price of $345.00, for a total transaction of $310,500.00. Following the completion of the transaction, the chief accounting officer directly owned 79,644 shares in the company, valued at $27,477,180. The trade was a 1.12% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders have sold 101,239 shares of company stock worth $27,174,360 in the last quarter. Company insiders own 1.40% of the company’s stock.

Analyst Upgrades and Downgrades Several analysts have commented on PANW shares. Deutsche Bank Aktiengesellschaft raised their target price on shares of Palo Alto Networks from $220.00 to $350.00 and gave the stock a “buy” rating in a report on Wednesday, June 3rd. Truist Financial upped their target price on shares of Palo Alto Networks from $275.00 to $375.00 and gave the stock a “buy” rating in a research note on Wednesday, June 3rd. Wolfe Research reissued an “outperform” rating and issued a $320.00 price target on shares of Palo Alto Networks in a research note on Wednesday, June 3rd. Capital One Financial set a $421.00 price objective on Palo Alto Networks and gave the stock an “overweight” rating in a research report on Thursday, July 16th. Finally, BNP Paribas Exane increased their price objective on Palo Alto Networks from $330.00 to $380.00 and gave the stock an “outperform” rating in a report on Wednesday, July 1st. One research analyst has rated the stock with a Strong Buy rating, forty have given a Buy rating, seven have issued a Hold rating and one has given a Sell rating to the company. Based on data from MarketBeat, the stock has an average rating of “Moderate Buy” and an average target price of $331.48.

Read Our Latest Research Report on PANW

Palo Alto Networks Profile (Free Report)

Palo Alto Networks (NASDAQ: PANW) is a cybersecurity company founded in 2005 and headquartered in Santa Clara, California. The firm develops a broad suite of security products and services designed to prevent successful cyberattacks and protect enterprise networks, clouds, and endpoints. Built around a platform strategy, its offerings target threat prevention, detection, response and governance across hybrid and multi-cloud environments.

The company’s product portfolio includes next‑generation firewalls as a core on‑premises capability, alongside cloud‑delivered security services and software for securing public and private clouds.

Featured Stories Five stocks we like better than Palo Alto Networks Could Truth API Become Trump Media’s First Meaningful Revenue Driver? Small Caps Are Crushing the S&P 500—3 Stocks Still Worth Buying Moog Is More Than a Missile Maker, and Wall Street Is Noticing A Boring Dividend Growth Strategy Becomes a Solid Defensive Play

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Palo Alto Networks Inc. PANW is emerging as one of Wall Street's preferred cybersecurity plays as concerns over increasingly powerful artificial intelligence models drive demand for security products and services.

The view follows comments from International Business Machines (IBM), which said last week that enterprise customers are placing greater emphasis on cybersecurity as more advanced AI models enter the market.

In a research note published Monday, William Blair named Palo Alto Networks its top pick in the cybersecurity sector, arguing that AI is creating more demand for cybersecurity solutions rather than reducing it.

Palo Alto shares fell about 3% to $338.19 on Tuesday after declining 2.8% in the previous session.

Despite the recent pullback, the stock has gained 83% this year and has posted gains in each of the past four months.

William Blair said discussions with private companies, resellers, industry participants and thought leaders pointed to strong cybersecurity spending during the second quarter.

The firm attributed the trend to increasing concerns surrounding Anthropic's Mythos AI model, demand for firewalls ahead of expected price increases and broader worries about AI-driven cyber threats.

Analyst Jonathan Ho wrote, "We are seeing a dramatic shift in prioritization as customers rush to purchase firewalls ahead of expected price increases and as supply chain challenges loom in the background."

The firm also said cybersecurity has become a higher priority following the release of Anthropic's Mythos model and Nvidia's next-generation Blackwell AI architecture.

According to William Blair, spending has been particularly strong for companies offering firewall products and vulnerability management services.

"We believe the strong near-term performance in security stocks following last quarter’s declines suggests that cybersecurity is now perceived as a beneficiary of AI," Ho wrote.

The report noted that vulnerability management has become a leading concern for customers, while spending on AI security and zero-trust projects has temporarily taken a back seat as organizations focus on addressing immediate risks associated with new AI models.

Palo Alto remains William Blair's top cybersecurity pickWilliam Blair maintained an Outperform rating on Palo Alto Networks, citing its competitive position and favorable demand trends.

"We believe Palo Alto continues to take share in the market and benefits from customers deciding to pull the trigger early as the perception is that price increases are coming and backlog/lead times are building," Ho wrote.

The firm said stronger firewall demand should support growth in both annual recurring revenue and product revenue, although rising hardware firewall component costs could weigh on margins.

William Blair also believes AI presents a long-term growth opportunity for established cybersecurity companies.

"AI offers a significant opportunity longer term, as platform vendors appear best positioned from a trust perspective to bring security for AI to customers," Ho wrote.

He added that it was "unlikely" that frontier AI model developers would replace traditional cybersecurity providers.

Palo Alto has also received a series of higher price targets from other Wall Street firms in recent weeks.

Tigress Financial Partners raised its target price to $430, citing the strength of the company's AI-driven platform following its third-quarter results.

Evercore ISI increased its target to $415 after positive channel checks and expectations for future free cash flow generation.

Needham also lifted its price target to $425, pointing to optimism surrounding the company's fiscal 2027 growth outlook following discussions with management.

IBM stock suffered its worst one-day decline on record after the technology group admitted that customers were moving money away from its products and towards urgently needed data-centre infrastructure.

The stock plunged 25.2% to $217.07 on Tuesday, leaving it just above its 52-week low, after preliminary second-quarter revenue and profit missed Wall Street forecasts.

Yet Barclays analyst Saket Kalia sees a potential winner on the other side of that spending shift: network-security companies selling firewalls.

As per TipRanks, his industry checks identified Palo Alto Networks, Fortinet and Check Point as potential beneficiaries.

Palo Alto Networks is one of the world’s largest firewall providers and gives customers a broad portfolio spanning network, cloud and security operations products.

Its position makes it an obvious beneficiary when companies prioritise cybersecurity spending over less urgent software projects.

The stock climbed 6.8% to $352.89 on Tuesday as IBM’s warning drew attention to the resilience of security budgets.

Kalia’s analysis suggested that demand for firewall hardware was benefiting from the same urgency pushing companies to secure servers and memory before costs rise further.

The difficulty is valuation. TipRanks’ comparison tool showed no analyst-implied upside for Palo Alto at Tuesday’s closing level.

Its average 12-month target was $333.31, below the market price, despite a Strong Buy consensus.

Fortinet supplied Kalia with the strongest numerical evidence that customers are already buying more security hardware.

Its first-quarter product revenue jumped 41% from a year earlier to $645 million, while total revenue rose 20% to $1.9 billion.

Kalia pointed to that product strength as evidence that the shift was appearing in firewall sales rather than remaining a theoretical opportunity.

The company specialises in FortiGate firewalls and builds many of its own security processors, allowing it to offer high-performance appliances at competitive prices.

That could be particularly attractive when customers need greater network capacity to protect expanding AI infrastructure.

Fortinet shares gained 3.9% to a record $166.83 on Tuesday. But, like Palo Alto, the rally has overtaken the broader analyst consensus.

TipRanks listed an average target of about $117, while Barclays’ own latest target was $155 and TD Cowen recently raised its target to $215.

Check Point was the most modest gainer of the three, rising 2% to $137.02, but it offered the clearest valuation case.

The platform showed a Moderate Buy consensus and an average target of $148.36, implying almost 9% upside from the price used in its analysis.

The target was based on 12 Buy and 18 Hold ratings, with no Sell recommendations.

Check Point has traditionally been viewed as a slower-growing but profitable cybersecurity company.

That positioning could become more attractive if the current spending shift favours established firewall vendors without supporting the premium valuations attached to faster-growing rivals.

Still, Kalia included an important warning. The boost “could be temporary,” because companies may simply be bringing purchases forward to avoid supply constraints and higher prices.

Once that wave passes, the sector could experience a digestion period similar to the slowdown that followed pandemic-era technology spending.

Key Takeaways BlackBerry's fiscal Q1 revenue rose 26% to $153M, with positive operating cash flow after nine years.BB reaffirmed Secure Comms revenue guidance and highlighted QNX momentum in automotive software.PANW grew revenue 31%, but integration costs and intense competition may pressure near-term profits. Cybersecurity has become one of the fastest-growing segments in enterprise technology as organizations face increasingly sophisticated cyber threats. From ransomware attacks to AI-powered phishing campaigns, businesses are investing heavily in security solutions to protect their digital assets. Against this backdrop, investors continue to look for cybersecurity companies capable of delivering sustainable long-term growth.

Two companies that often attract investor attention are BlackBerry Limited (BB - Free Report) and Palo Alto Networks (PANW - Free Report) . Per a report from Fortune Business Insights, the global cybersecurity market is estimated to go from $248.3 billion in 2026 to $699.4 billion by 2034 at a CAGR of 13.8%. While both operate in cybersecurity, they are at very different stages of their transformation and growth journeys. BlackBerry is reinventing itself after exiting the smartphone business, while Palo Alto Networks has established itself as a dominant force in enterprise cybersecurity.

Both help enterprises defend against cyber threats, though with different product focuses. So, which stock offers the better investment opportunity today?

The Case for BB StockBlackBerry operates primarily through two businesses –Secure Communications and Cybersecurity and QNX embedded software for automotive and industrial applications. Its cybersecurity offerings include endpoint security, identity protection, secure communications and AI-driven threat detection. Its QNX operating system powers millions of vehicles worldwide and is increasingly benefiting from trends such as connected cars and ADAS. BB delivered a strong start to fiscal 2027, with first-quarter revenue rising 26% year over year to $153 million, surpassing guidance. Its adjusted EBITDA more than doubled to about $36 million and generated a positive operating cash flow of about $5 million, marking its first positive first-quarter operating cash flow in nine years.

Image Source: Zacks Investment Research

One area where BlackBerry clearly differentiates itself is automotive software. As autonomous driving, software-defined vehicles and electric vehicles continue growing, QNX could become an increasingly valuable asset. QNX is driven by record development license revenue, new automotive and GEM design wins, and continued momentum in long-term opportunities such as GEM expansion, Physical AI and the Alloy Kore platform.

Secure Communications delivered its strongest quarter in years, with revenue increasing 24% year over year, driven by robust government demand and significant contract wins. Customer retention, recurring revenue and government demand for secure communications solutions continue to show encouraging momentum. A multiyear expansion with Shared Services Canada, driven by rising demand for digital sovereignty and cybersecurity, significantly boosted fiscal first-quarter revenue through the expanded deployment of Secusmart's encrypted communications solutions. Management cautioned that large government contracts have long sales cycles, making this quarter’s outsized growth unlikely to recur every quarter. Still, this unit is evolving into a stable growth business with upside from major government wins. 

Recently, BB upgraded AtHoc with Microsoft Teams and Entra ID integrations for faster emergency response. AtHoc supports recurring software revenue alongside Secure Comm and QNX growth. In June, the Secure Comms arm also upgraded its Unified Endpoint Management platform, aimed at addressing the evolving needs of enterprises, governments and highly regulated industries. The company reaffirmed its full-year revenue guidance for Secure Comms of $270–$280 million, representing 4–8% growth.

Despite possessing valuable technology, BlackBerry continues to face challenges. Revenue growth has remained inconsistent over the past few years, reflecting intense competition in enterprise cybersecurity. Larger rivals with broader product portfolios have captured a significant share of new enterprise spending. Although management has streamlined operations and reduced costs, investors are still waiting for sustained revenue acceleration and stronger profitability. Investors should also recognize that automotive software follows longer development cycles than enterprise cybersecurity, meaning revenue growth tends to be slower and less predictable.

The Case for PANW StockPalo Alto continues to benefit from higher cybersecurity priority as enterprises deploy AI and look to consolidate vendors onto fewer platforms. PANW reported fiscal third-quarter revenues of $3 billion, expanding 31% year over year. The company continues to strengthen its AI-driven cybersecurity platform, leveraging advanced AI models and strategic partnerships to enhance threat detection and defense. Strong customer demand drove continued platform adoption, with 110 new platformizations during the quarter, supporting its long-term goal of surpassing 4,000 platformized customers and reaching $20 billion in next-generation security ARR by fiscal 2030.

Image Source: Zacks Investment Research

Post-acquisition integration remains on track, with product innovation, cost efficiencies and cross-selling driving faster-than-expected profitability. CyberArk and Chronosphere continue to strengthen growth in next-generation security, while operational efficiencies and synergy realization support the company's long-term margin and free cash flow targets. These additions expand Palo Alto’s addressable markets into identity security and observability, which management views as crucial in an agentic AI era. PANW reported RPO of $18.4 billion, 36% year over year. Around $1.8 billion came from acquired businesses. A growing RPO indicates customers are committing to larger, longer-term cybersecurity contracts. This provides excellent revenue visibility and demonstrates confidence in the company's integrated platform strategy.

The company continues to advance its platform capabilities, endpoint security and AI-native solutions. In June, PANW expanded Project Lightwell with IBM and Red Hat, integrating virtual patching and software remediation to help organizations identify vulnerabilities and reduce exposure to emerging cyber threats. Also, it partnered with Deutsche Telekom to launch Sovereign Cortex with T Security, delivering AI-driven security operations with enhanced data sovereignty controls for regulated European industries. In May, PANW completed the acquisition of Portkey, expanding its Prisma AIRS platform with capabilities to monitor, orchestrate and govern AI agents at scale. It launched Idira, an identity security platform designed to manage and secure human, machine and AI agent identities across enterprises.

However, near-term prospects for Palo Alto might be hurt by changing customer behavior. In the past few quarters, various competitors in the cybersecurity space have noticed that the companies have been breaking their cybersecurity investment plans into phases and implementing the same over longer periods of time, instead of making a single large investment. Rising integration costs from the CyberArk and Chronosphere acquisitions are expected to weigh on PANW's near-term profitability as the company integrates employees, operations and go-to-market teams.

Increasing competition from Microsoft, CrowdStrike and other cybersecurity firms is a major woe. To survive in the highly competitive cybersecurity market, each player must continually invest in broadening its capabilities. Over the past few years, Palo Alto has invested heavily to enhance its sales and marketing capabilities, particularly by increasing the sales force. This has raised its operating expenses.  Slower operating leverage would weigh on it even if revenues remain on plan. Furthermore, though PANW foresees these investments to garner benefits over the long run, uncertainty about the payback period still looms.

Price Performance Trajectory for BB & PANWYear to date, BB and PANW have registered gains of 189.4% and 76.9%, respectively.

Image Source: Zacks Investment Research

Valuation ComparisonsBlackBerry typically trades at a much lower valuation because investors remain uncertain about its turnaround. A lower valuation can offer potential upside if management successfully accelerates growth. Palo Alto Networks commands a premium valuation.

In terms of the forward 12-month price/earnings multiple, BB is trading at 72.67X, lower than PANW's 146.44X.

Image Source: Zacks Investment Research

How Does the Zacks Consensus Estimate Compare for BB & PANW?The Zacks Consensus Estimate for BB earnings for fiscal 2027 has been revised down over the past 60 days.

Image Source: Zacks Investment Research

Meanwhile, for PANW, there is a marginal upward estimate revision.

Image Source: Zacks Investment Research

BB or PANW: Which Stock is the Better Buy?If BlackBerry successfully expands cybersecurity adoption while monetizing QNX more effectively, its shares could deliver healthy long-term gains. However, the path remains uncertain. Platform consolidation, AI security demand, expanding recurring revenues and cash flow, and disciplined integration support steady long-term growth for Palo Alto. However, intensifying competition, an uncertain economic environment and acquisition integration risks remain key concerns.

BB, at present, carries a Zacks Rank #2 (Buy) while PANW has a Zacks Rank #3 (Hold). Consequently, in terms of Zacks Rank and valuations, BB provides a more compelling risk-reward profile for investors. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Key Takeaways PANW added 110 new platformized customers in Q3 2026, bringing the total to about 2,280 customers.PANW is expanding its platform with CyberArk and Chronosphere to strengthen security capabilities.PANW targets more than 4,000 platformized customers and $20 billion in Next-Generation Security ARR by 2030. Palo Alto Networks (PANW - Free Report) is focusing on its platformization strategy, which involves getting its customers to adopt multiple PANW products spanning across network, cloud and endpoint security, under a unified platform approach. In the third quarter of fiscal 2026, the company added 110 new platformized customers, including 20 from the CyberArk and Chronosphere acquisitions. Total platformized customers reached approximately 2,280 at the end of the third quarter.

Platformized customers continue to show strong spending and retention trends. PANW's platformized customers currently have a 120% net retention rate and single-digit churn. This means existing customers continue to buy more PANW products over time, while very few leave the platform. During the third quarter, the company shared examples of customers expanding their deployments. A large U.S. power producer adopted next-generation firewalls and SASE in an $80 million deal, while a global consulting company signed a contract worth more than $20 million to use Prisma AIRS for securing its AI applications and agents.

PANW is also expanding its platform through acquisitions. The CyberArk acquisition adds identity security, while Chronosphere strengthens its observability capabilities. The company has already launched around 1,000 cross-selling engagements related to CyberArk. Management believes these additions will help customers manage network security, cloud security, identity security, AI security and security operations from a single platform instead of using multiple vendors.

Platformization is central to PANW's long-term financial goals. The company aims to reach more than 4,000 platformized customers and $20 billion in Next-Generation Security annual recurring revenues by fiscal 2030. If adoption continues to rise, PANW's platformization strategy could remain one of the most important contributors to the company’s long-term growth. The Zacks Consensus Estimate for fiscal 2026 and 2027 revenues indicates a year-over-year increase of around 23.7% and 20.2%, respectively.

How Competitors Fare Against PANWCompetitors like CrowdStrike (CRWD - Free Report) and SentinelOne (S - Free Report) are also gaining ground through platform expansion and AI innovation.

CrowdStrike ended its first quarter of fiscal 2027 with $5.51 billion in ARR, reflecting 24% year-over-year growth. The robust increase was fueled by the growing adoption of CrowdStrike’s Falcon Flex subscription model.

Though comparatively a small competitor, SentinelOne posted first-quarter fiscal 2027 year-over-year growth of 23% in its ARR. The growth was fueled by the rising adoption of SentinelOne’s AI-first Singularity platform and Purple AI.

PANW’s Price Performance, Valuation & EstimatesShares of Palo Alto Networks have jumped 83.4% in the year-to-date period compared with the Zacks Security industry’s return of 61.2%.

PANW’s YTD Price Return Performance
Image Source: Zacks Investment Research

From a valuation standpoint, Palo Alto Networks trades at a forward price-to-sales ratio of 20.31X compared with the industry’s average of 18.07X. The Zacks Value Score of F also suggests that PANW stock is overvalued.

PANW Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research

The Zacks Consensus Estimate for Palo Alto Networks’ fiscal 2026 and 2027 earnings implies year-over-year growth of 12.9% and 8.1%, respectively. The estimates for fiscal 2026 and 2027 have been revised up by 6 cents and 8 cents, respectively, over the past 60 days.

Image Source: Zacks Investment Research

Palo Alto Networks currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Cybersecurity company Palo Alto Networks, Inc. (PANW) rises 3,770% since first institutional outlier inflow signal in 2013.

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PANW is an AI-first cybersecurity company offering network security solutions to enterprises, service providers, and governments. PANW’s third-quarter 2026 report showed $3 billion in revenue (a 31% year-over-year rise), $8.13 in next generation security annual recurring revenue (a 60% jump), non-GAAP per-share earnings of $0.85, and raised full-year revenue guidance to a high end of $11.425 billion and up to $3.79 in non-GAAP diluted EPS.

No wonder PANW shares are up 30% this year – and they could rise more. MoneyFlows data shows how Big Money investors are again betting heavily on the stock.

Institutions Returning to Palo Alto Institutional volumes reveal plenty. In the last year, PANW has enjoyed strong investor demand, which we believe to be institutional support.

Each green bar signals unusually large volumes in PANW shares. They reflect our proprietary inflow signal, pushing the stock higher:

Source: www.moneyflows.com Plenty of technology names are under accumulation right now. But there’s a powerful fundamental story happening with Palo Alto.

Palo Alto Fundamental Analysis Institutional support and a healthy fundamental backdrop make this company worth investigating. As you can see, PANW has had strong sales and earnings growth:

3-year sales growth rate (+18.9%) 3-year EPS growth rate (+199.6%) Source: FactSet

Also, EPS is estimated to ramp higher this year by +8.9%.

Now it makes sense why the stock has been generating Big Money interest. PANW has a track record of strong financial performance.

Marrying great fundamentals with MoneyFlows software has found some big winning stocks over the long term.

Palo Alto has been a top-rated stock at MoneyFlows. That means the stock has unusual buy pressure and growing fundamentals. We have a ranking process that showcases stocks like this on a weekly basis.

It’s had six Big Money outlier inflow signals in the last year, gaining 67.3% in that time. The blue bars below shows when PANW was a top pick…institutions love this stock:

Source: www.moneyflows.com Tracking unusual volumes reveals the power of money flows.

This is a trait that most outlier stocks exhibit…the best of the best. Big Money demand drives stocks upward.

Palo Alto Price Prediction The PANW action isn’t new at all. Big Money buying in the shares is signaling to take notice. Given the historical gains in share price and strong fundamentals, this stock could be worth a spot in a diversified portfolio.

Disclosure: the author holds no position in PANW at the time of publication.

If you are a Registered Investment Advisor (RIA) or are a serious investor, take your investing to the next level and follow our free weekly MoneyFlows insights.

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Lucas is a well-versed equity investor and educator. He currently is co-founder of research and analytics firm, MAPsignals.com, which focuses on finding outlier stocks by following the Big Money.

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