Palo Alto Networks, Inc. provides cybersecurity solutions across the Americas, Europe, the Middle East, Africa, Asia Pacific, and Japan. Its offerings include Prisma Access, Strata Cloud Manager, Prisma AIRS, a cloud-native application protection platform, and the Code to Cloud platform, along with VM-Series and CN-Series virtual firewalls. The company also provides the Cortex platform for security operations, featuring Cortex XSIAM, Cortex XDR, Cortex XSOAR, and Cortex Xpanse, plus threat intelligence and advisory services under Unit 42. It sells through channel partners and directly to enterprises, service providers, and government entities. Incorporated in 2005, it is headquartered in Santa Clara, California.
Palo Alto Networks Fair Value Estimate Raised 17% to US$395.38
The fair value estimate for Palo Alto Networks has been raised from US$336.70 to US$395.38, a roughly 17% increase in the underlying model, after a wave of analyst price target hikes. RBC Capital, Wells Fargo, BofA, Morgan Stanley and Truist lifted their targets into the low to mid US$400s, citing stronger cybersecurity demand as AI usage expands and customers consolidate spending with larger platforms. Goldman Sachs, Oppenheimer, BTIG and Susquehanna pointed to solid Q4 results and guidance, with broad based strength across firewalls, SASE, observability, identity and AI security modules. On the bearish side, Bernstein and Phillip Securities moved to more neutral stances while still raising targets, and Stephens and UBS described the risk or reward as more balanced with shares near peak valuation levels. The updated model trims the revenue growth assumption to about 17.31% from about 19.09% and the net profit margin outlook to about 13.84% from about 14.51%, while the future P/E rises to about 197.87x from about 164.67x and the discount rate adjusts to about 8.60% from 8.40%.
Palo Alto Networks SASE Bookings Jump 40% as Displacements Hit $400 Million
Palo Alto Networks said its SASE bookings grew 40% in fiscal 2026, with the company displacing legacy vendors in nearly 100 customer accounts representing more than $400 million in total contract value, roughly double the prior year's displacement volume. Management said PANW is currently the No. 2 player in SASE and aims to become the market leader over the next five to seven years, helped by integrating SASE with its firewall and SD-WAN products so existing customers can standardize on one vendor. In the fourth quarter of fiscal 2026, a global telecom leader signed a $126 million agreement to expand its next-generation firewall footprint while replacing legacy proxy providers with Prisma Access for SASE, and agentic traffic on the company's SASE platform has increased 9x over the past nine months. Rival Fortinet said its SASE Firewall business grew 34% in the second quarter of 2026 to more than $2 billion, while Unified SASE billings rose 35%, and Zscaler reported ARR up 25% year over year in the fourth quarter of fiscal 2026. Palo Alto Networks shares have jumped 104.1% year to date versus a 92.6% gain for the Zacks Security industry, and the stock trades at a forward price-to-sales ratio of 21.31X against an industry average of 19.13X.
Retail traders chased cyber options but skipped the stocks, Vanda says
Retail investors piled into cybersecurity options during the sector's recent rally but stayed net sellers of some underlying shares, according to Vanda Analytics. Retail out-of-the-money call turnover across CrowdStrike, Palo Alto Networks and Zscaler jumped into the 98th percentile of its history over the past five sessions, yet retail investors were net sellers of $6.4M of Palo Alto Networks and $3.5M of Zscaler in the previous session. Institutional positioning was also light ahead of the move, with Vanda's institutional call-put ratio score for its cybersecurity basket at -0.27 as of Sept. 14, below its median since 2017 and well below the +0.84 recorded in January. The positioning came before the Global X Cybersecurity ETF recorded its biggest one-day gain on record, Vanda said. Viraj Patel, chief innovation officer and global market strategist at Vanda Analytics, said retail investors participated in the rally mainly through short-dated options rather than by rebuilding outright positions in the underlying stocks, leaving potential room for retail cash buying to increase if the rally extends.
Palo Alto Networks has completed its US$3.14 billion share repurchase program begun in 2019 and issued new fiscal 2027 revenue guidance of US$14.10 billion to US$14.20 billion, representing 23 to 24 percent growth. The company also filed a US$2.74 billion ESOP-related shelf registration and reported a shift from quarterly profit to loss despite higher revenue. The moves come amid rising AI-related cybersecurity demand, with Palo Alto Networks' Frontier AI Critical Defense Program and its participation in emerging standards bodies such as Verizon's 6G Innovation Forum underscoring its role in securing next-generation AI and network infrastructure. The company's longer-range narrative projects US$17.9 billion in revenue and US$2.6 billion in earnings by 2029, requiring 19.1 percent yearly revenue growth and an earnings increase of about US$1.8 billion from US$842.9 million today. The key catalyst to watch is whether AI-centric products and large platform deals can support that growth without further squeezing reported margins.
SE Labs Launches First Public PIVOT Security Test With Five Major Vendors
SE Labs announced the first public evaluation under PIVOT, its advanced security testing programme, with Broadcom, CrowdStrike, Fortinet, Palo Alto Networks and Sophos confirmed to take part. Results will be published in early 2027 and will include a comparative analysis of the participating products, detailed findings from the attack scenarios and SE Labs' inaugural public PIVOT Rankings. The evaluation arrives as several major vendors have stepped away from MITRE Engenuity ATT&CK Evaluations, reducing the number of leading products assessed through what had been one of the industry's most prominent common sources of technical evaluation data. PIVOT follows complete attack chains to show what happened during an attack, how far an attacker progressed, what defenders could see and understand, and how those outcomes compare across competing products, rather than stopping at evidence of what a product detected. Simon Edwards, CEO and founder of SE Labs, said the underlying evidence will be made available to Gartner and Forrester so their analysts can examine it and add their own independent interpretation.
CrowdStrike and Palo Alto Networks Race Into AI Cybersecurity
CrowdStrike and Palo Alto Networks are racing to answer the question Jensen Huang raised on Sept. 10, when he told investors at the Goldman Sachs Communacopia + Technology Conference that cybersecurity is likely to become AI's next major growth market. CrowdStrike unveiled SafeMind at its Fal.Con conference on Sept. 1, an agentic cybersecurity system built by its own Cyber Superintelligence Lab on top of open Nemotron models, which the company says detects threats 29% more accurately and remediates them six times faster than the frontier models it benchmarked against. CrowdStrike's fiscal second quarter revenue rose 26% to $1.47 billion, with net new annual recurring revenue climbing 51% to a record $333 million, and CEO George Kurtz disclosed an eight-figure Falcon Flex deal with a frontier AI lab. Palo Alto Networks took the opposite path, integrating CyberArk and Chronosphere and adding Console, an AI native platform for agentic enterprise workflows; its Next Generation Security annual recurring revenue reached $9.1 billion, up 63% year over year, and total remaining performance obligations crossed $20 billion for the first time, rising 34% to $21.2 billion, even as it swung to a GAAP net loss of $282 million in the quarter. Investors rewarded only CrowdStrike's report, sending its shares up roughly 20% on Aug. 27, while Palo Alto's shares fell more than 5% despite revenue rising 34% to $3.41 billion in its fiscal fourth quarter. The threat behind both bets is not hypothetical: Anthropic told Reuters it disrupted a Russia-linked hacking campaign that used its Claude models against more than 20 Ukrainian government and defense targets, and a joint study by Wiz and Irregular found AI agents completed sophisticated offensive security challenges for under $50 in computing costs versus close to $100,000 for the same work by paid human researchers.
CrowdStrike, Zscaler Jump 12% as AI Safety Warnings Spark Security Bid
Cybersecurity pure-plays surged Monday after weekend AI safety warnings from Anthropic CEO Dario Amodei and OpenAI CEO Sam Altman drove a narrow sector bid. CrowdStrike rose 12% to $232.08, Zscaler rose 12% to $183.97, and Palo Alto Networks jumped 11% to $366.40 in midday trading, while Okta joined the move as the group's identity-security peer. The First Trust NASDAQ Cybersecurity ETF rose just 4% and the SPDR S&P 500 ETF Trust fell 0.7%, leaving the wider networking and infrastructure membership of the sector fund largely out of the move. Amodei published a 3,800-word essay on Saturday calling on frontier AI companies to slow the pace at which they improve model capabilities, and Altman said he agreed, warning early Monday about losing control of the future to AI. CrowdStrike CEO George Kurtz responded over the weekend, arguing frontier labs will keep advancing regardless and that the cybersecurity industry's job is to make that development safer, after the company's Fal.Con conference introduced Falcon Guardian, SafeMind and an Agentic Identity Provider, with RBC Capital, Raymond James and Wedbush each reiterating positive ratings and raising price targets. CrowdStrike is up 98% year to date and Palo Alto is up 99%, while Zscaler is down 18% year to date; CrowdStrike's next catalyst is its Q3 FY27 report, with guidance of $1.523 billion to $1.529 billion in revenue and non-GAAP diluted EPS of $0.31, after Q2 FY27 total revenue grew 25.8% year over year to $1.47 billion and record net new ARR of $332.8 million.
Verizon Adds Nine Members to 6G Innovation Forum, Reports ISAC and AI Trials
Verizon announced the expansion of its 6G Innovation Forum with nine new members and reported successful pre-standard field trials of Integrated Sensing and Communication and an AI Sports Companion prototype. Amazon Web Services, Cisco, Intel, Keysight Technologies, MediaTek, NVIDIA, Palo Alto Networks, Rohde & Schwarz and VIAVI Solutions have officially joined the forum, which was launched last year and already includes founding members Ericsson, Samsung, Nokia, Meta and Qualcomm Technologies. In one trial staged at a major international soccer celebration in Dallas, Texas, Verizon and Samsung used a single 5G base station and 40MHz of CBRS spectrum to track radio variations from six Samsung Galaxy smartphones, with Samsung's AI RAN and edge AI platform Network in a Server generating real-time crowd-density heatmaps on commercial phones and a tablet. In a second trial at Qualcomm's San Diego campus, the companies used 100 to 400MHz of millimeter-wave spectrum and four synchronized Transmission and Reception Points to track an airborne drone and moving ground vehicles while maintaining uninterrupted 5G Standalone communications to a phone user on the ground. Verizon also showcased a prototype AI Sports Companion application running on the Verizon Edge Network with Meta AI glasses, a locally optimized Small Language Model, an NVIDIA DGX Spark and statistics from SportsDataIO, letting users ask verbally for real-time player statistics, live score interpretations and game-winning probabilities. Verizon said forum members will continue sharing learnings from future demonstrations involving ISAC, digital twins, robotics, AI and advanced wearables, and it views the 2028 Summer Olympics in Los Angeles as the ultimate interim proving ground on the road to commercial 6G deployment, supported by its dedicated 6G Lab already established in the host city.
PhillipCapital Downgrades Palo Alto Networks to Neutral, Raises Target to $346
PhillipCapital downgraded Palo Alto Networks to Neutral from Accumulate on September 7, while raising its price target to $346 from $320. The call captures the central debate on the cybersecurity company: its AI and platformization opportunity is compelling, but a roughly 160% stock rally from its February low to its August peak has raised the bar for further gains. Palo Alto's revenue rose 34% year over year to $3.4 billion in its fiscal 2026 fourth quarter, and Next-Generation Security ARR surged 63% to $9.10 billion, with nearly $1 billion of net new NGS ARR added in the quarter and more than 65% of that ARR coming from platformized customers. For fiscal 2027, management expects NGS ARR growth of 22% to 23% and revenue growth of 23% to 24%, though it still expects 63% NGS ARR growth in the fiscal 2027 first quarter, and it targets $20 billion in NGS ARR by fiscal 2030. PhillipCapital rolled its valuation forward and lifted its weighted average cost of capital to 5.2%, citing higher debt and a larger share count following acquisitions, while hedge funds holding the stock rose to 89 in the second quarter from 87 in the first and short interest reached 22.4 million shares, or 2.79% of the public float, as of August 14.
Ken Fisher Adds Cisco and Palo Alto Networks in AI Security Bet
Ken Fisher's Fisher Asset Management increased its stakes in Cisco Systems and Palo Alto Networks, according to consecutive SEC filings covering March-to-June changes. Cisco shares rose from 17,301,583 to 33,412,725, while the Palo Alto position increased from 256,661 to 5,755,989 shares. Cisco's fiscal fourth-quarter networking revenue increased 28% to approximately $9.8 billion, with security revenue up 14% to about $2.2 billion and total operating cash flow of $5.4 billion. Palo Alto's September 1 results showed fiscal fourth-quarter revenue up 34% to $3.41 billion and next-generation security annual recurring revenue of $9.10 billion, alongside a $282 million GAAP net loss driven by a fair-value charge on acquired convertible notes. August 14 short interest stood at 1.50% of Cisco's float and 2.79% of Palo Alto's, and the filings disclose no AI thesis behind the positions.
Palo Alto Networks Falls 3% After Critical PAN-OS Vulnerability Advisory
Palo Alto Networks shares fell 3% in the afternoon session after the company published a security advisory addressing a critical buffer overflow vulnerability in its PAN-OS software. The advisory detailed an XML processing flaw cataloged as CVE-2026-0310 with a CVSSv4 base score of 9.2, a high-severity vulnerability that enables unauthenticated attackers to execute arbitrary code with root privileges or trigger denial-of-service conditions. The decline came despite positive analyst action, as Wedbush analyst Steven Wahrhaftig assumed coverage of Palo Alto Networks with a Buy rating and a $400 price target, placing the stock on the firm's Best Ideas List due to its platformization leadership. After the initial drop, the shares shed some of the losses and rose to $328.75, down 2.9% from the previous close. The stock is up 83.3% since the beginning of the year but remains 17% below its 52-week high of $396 from August 2026.
Palo Alto Networks Posts 63% NGS ARR Growth but $282M GAAP Net Loss
Palo Alto Networks reported fiscal fourth-quarter revenue of $3.41 billion, up 34% year over year, alongside a $282 million GAAP net loss after earning $254 million a year earlier. Next-Generation Security annual recurring revenue rose 63% to $9.10 billion, though the company said the increase is not an organic growth rate because the current portfolio includes acquired identity and observability businesses absent from the prior-year base, and remaining performance obligations climbed 34% to $21.2 billion. GAAP operating income fell to $172 million from $497 million, cutting GAAP operating margin to 5.0% from 19.6%, while company-defined non-GAAP operating income reached $1.01 billion and non-GAAP net income was $853 million. The quarter's operating reconciliation included $487 million of share-based compensation-related charges, $281 million of acquired-intangible amortization and $68 million of acquisition-related costs, and the net-income gap also reflected a $524 million fair-value change in convertible senior notes acquired in the CyberArk transaction. Operating cash flow rose to $1.36 billion from $1.02 billion, and management guided fiscal 2027 revenue of $14.10 billion to $14.20 billion, growth of 23% to 24%, with NGS ARR expected to reach $11.075 billion to $11.175 billion, up 22% to 23%.
Artificial intelligence (AI) technology has begun to generate real applications and revenue at the enterprise level, creating a chain of positive impacts from software and cloud to semiconductors. Yuanta Securities noted that AI adoption is transforming software costs into cloud revenue, with companies like Snowflake, Salesforce, and ServiceNow benefiting from AI agents, while NVIDIA is expanding its moat by controlling the source through Hugging Face. However, SEMICON Taiwan 2026 highlighted bottlenecks, such as TSMC's demand for chip-making equipment nearly doubling in six months, and memory issues that forced Google to reuse DDR4. The Asian supply chain is fully benefiting, with South Korea's semiconductor exports surging 209% year-over-year. Earnings from Dell, Broadcom, Snowflake, Credo, and Palo Alto Networks reflect strong demand, such as Dell's record-high AI server orders at $60.9 billion and Broadcom's AI revenue growing 221%.
7 of 8 S&P 500 Firms Beat EPS Estimates as All Report Profit Growth
In a notable earnings week, seven of eight key S&P 500 companies beat consensus EPS estimates, with all eight posting year-over-year profit growth, though revenue performance was mixed. Dell Technologies jumped 15.81% after reporting a 58% revenue increase to $46.97 billion and adjusted EPS of $7.04, driven by AI server demand, and guided third-quarter revenue to $49 billion. Palo Alto Networks slipped 9.28% despite beating estimates with revenue up 34% to $3.41 billion and adjusted EPS of $1.02, while issuing an optimistic forecast. Medtronic rose 1.53% after revenue grew 13.8% to $9.76 billion and raised its full-year guidance. Broadcom dropped 2.7% on lower-than-expected Q4 revenue guidance despite strong Q3 results with revenue up 86% to $29.59 billion. Lululemon shares fell nearly 20% after cutting its full-year sales forecast to $10.35B-$10.50B, down from $11.0B-$11.50B, due to declining China sales. Brown-Forman gained 3.87% on mixed results, NetApp rose 2.55% despite a free cash flow drop, and Campbell's fell 6.96% after missing revenue estimates and cutting its dividend by 36%.
Jim Cramer Bullish on Palo Alto After Strong Earnings
Jim Cramer expressed bullishness on Palo Alto Networks after the company delivered strong fiscal fourth-quarter 2026 results, though the stock fell 9.3% on September 2 despite the beat. Palo Alto reported revenue of $3.41 billion, up 34% year over year and above the $3.35 billion estimate, with adjusted earnings of $1.02 per share versus $0.98 expected. Next-Generation Security ARR rose 63% to $9.10 billion, but management's fiscal 2027 guidance implies a slowdown to 22-23% growth for NGS ARR, which is a key concern. The company also faces execution risk from integrating acquisitions like CyberArk and Chronosphere. Hedge fund holdings edged up to 89 funds in the second quarter from 87, and short interest was about 2.8% of float.
Ollie's Bargain Outlet Holdings Inc. reported second-quarter fiscal 2026 adjusted earnings of $1.42 per share, surpassing the Zacks Consensus Estimate of $1.14, and its shares advanced 2.1%. In contrast, G-III Apparel Group Ltd. posted second-quarter fiscal 2027 revenues of $554.09 million, missing the consensus estimate of $570.40 million, causing its shares to plunge 11.5%. Palo Alto Networks Inc. saw its shares plummet 9.3% after reporting fourth-quarter fiscal 2026 Subscription and Support revenues and adjusted gross profits below the Zacks Consensus Estimate. Uber Technologies Inc.'s shares rose 1.6% following its decision to lay off 3,300 employees, or 10% of its total workforce.
Palo Alto Networks Shares Plunge 10.5% on Q2 Earnings
Palo Alto Networks shares fell 10.5% in afternoon trading after the company reported second-quarter fiscal 2026 earnings that, while beating estimates, failed to impress Wall Street. Revenue came in at $3.41 billion, up 34.4% year over year and a 1.7% beat, while adjusted earnings per share of $1.02 topped expectations by 4.4%. The company guided next quarter's sales to $3.31 billion at the midpoint, above analyst estimates of $3.21 billion, and projected fiscal 2027 adjusted EPS of $4.18, beating estimates by 1.6%. CEO Nikesh Arora attributed the performance to platformization and urgency around AI threats, but high expectations for cybersecurity incumbents weighed on the stock.
Palo Alto Networks Stock Buy on $9.1B AI Security Boom
Palo Alto Networks reported $9.1 billion in Next-Generation Security ARR for fiscal Q4 2026, up 63% year over year, and issued strong guidance, reinforcing its competitive edge against CrowdStrike and Fortinet. The company added nearly $1 billion in net new NGS ARR in the quarter, while remaining performance obligations rose 34% to $21.2 billion. For fiscal Q1 2027, Palo Alto Networks expects NGS ARR of $9.54 billion to $9.56 billion, up about 63% year over year, and for fiscal 2027 it projects NGS ARR of $11.075 billion to $11.175 billion, representing 22-23% growth. The company also reported non-GAAP operating income of $1 billion, up roughly 30%, and adjusted free cash flow of $1.3 billion. With a forward price-to-earnings ratio of 88, below the Security industry average of 147.47, Palo Alto Networks currently holds a Zacks Rank #2 (Buy).
Palo Alto Networks Stock Plunges 9% After Q4 Earnings Miss
Palo Alto Networks stock crashed 9% in early trading after the company reported fiscal Q4 earnings that, while beating revenue and adjusted profit expectations, showed a wider-than-expected GAAP loss. Revenue grew 34% year over year to $3.4 billion, surpassing the $3.35 billion analysts had forecast, and adjusted earnings came in at $1.02 per share, four cents above estimates. However, the company posted a GAAP loss of $0.35 per share, reversing a $0.36 profit in the year-ago quarter, and full-year GAAP profit plunged 75% to $0.40 per share. Free cash flow for the quarter was $1.3 billion, and for the full year it rose 17% to $4.1 billion. Despite the strong adjusted results, the market's negative reaction reflects concerns over the GAAP loss and the stock's rich valuation, trading at roughly 72 times free cash flow.
Palo Alto Networks Beats Q4 Estimates on Platformization Strength
Palo Alto Networks reported fourth-quarter fiscal 2026 non-GAAP earnings of $1.02 per share, beating the Zacks Consensus Estimate by 4.1% and up 7.4% year over year. Revenues climbed 34% to $3.41 billion, topping estimates by 1.8%, driven by strength across Network & AI Security, Cortex, and Idira, with Next-Generation Security ARR jumping 63% to $9.10 billion. Within total revenues, product revenues rose 28.6% to $738 million, accounting for 21.6%, while subscription and support revenues grew 36.2% to $2.672 billion, representing 78.4%. By platform, Network & AI Security contributed $2.331 billion, Cortex $586 million, and Idira $336 million, with other revenues at $157 million. Remaining performance obligations rose 34% to $21.2 billion, and net new NGS ARR reached approximately $970 million, up 98% year over year, with the company adding roughly 220 net new platformizations. Prisma AIRS reached about $120 million in ARR within a year of general availability, XSIAM ARR exceeded $700 million, and observability ARR surpassed $500 million. Non-GAAP gross margin was 74.8%, down from 75.8%, due to a SaaS mix shift, while operating margin slipped to 29.6% from 30.3%. Adjusted free cash flow rose to $1.289 billion. For fiscal 2027, the company forecasts revenues of $14.10-$14.20 billion, NGS ARR of $11.075-$11.175 billion, and non-GAAP EPS of $4.16-$4.19.
Stock index futures were mixed on Wednesday after technology stocks dragged Wall Street lower in the previous session. Nvidia fell 0.25% in premarket trade as it advanced talks to acquire AI company Hugging Face in a transaction that may total about $14B, with an agreement valued at $12.9B possible as soon as this week, including a $1B retention package for employees. Chevron rose 0.13% after confirming it will expand operations in Venezuela, planning to spend more than $7B over five years to more than double production to about 600K barrels per day. Palo Alto Networks dropped 1.77% despite reporting fiscal Q4 adjusted EPS of $1.02, beating the $0.98 consensus, and revenue of $3.41B, up 34% year over year. Vertiv Holdings fell 0.58% after its subsidiary agreed to acquire UtilityInnovation Group for about $1.45B in cash plus up to $1.15B in earnouts, expanding its power and cooling portfolio.
Palo Alto CEO Warns $1 Trillion Cybersecurity Not Ready for AI
Palo Alto Networks Inc. CEO Nikesh Arora warned that about $1 trillion of existing cybersecurity infrastructure, built before the advent of AI, is not ready for the new threat landscape, presenting both a challenge and a growth opportunity for the company. The firm reported fiscal fourth-quarter revenue up 34% to $3.41 billion, with next-generation security annual recurring revenue rising 63% to $9.1 billion. Palo Alto forecasts fiscal 2027 revenue between $14.1 billion and $14.2 billion, an increase of about 23% to 24%, driven by the need for newer security platforms as attackers use more powerful AI tools. The company's next challenge is capturing a share of that estimated $1 trillion replacement potential as corporations rethink security for an AI-driven environment.
Vertiv to Acquire UtilityInnovation Group for $1.45 Billion
Vertiv announced the $1.45 billion acquisition of UtilityInnovation Group, with up to $1.15 billion in additional consideration tied to EBITDA targets over 12- and 24-month periods, sending its shares down less than 1% premarket. Sirius rose over 3% after Deutsche Bank upgraded it to buy with a $45 price target, implying more than 60% upside. Dell Technologies jumped 8% after beating expectations and lifting its fiscal 2027 forecast on strength in AI services. Palo Alto Networks fell nearly 2% despite beating earnings estimates, while MongoDB dropped 13% despite better-than-expected results and guidance. Credo Technology declined about 9% after its non-GAAP gross margin slightly missed expectations.
Palo Alto Networks Acquires Console to Boost AI Security
Palo Alto Networks has agreed to acquire AI-native platform Console to bring agentic AI capabilities into its Cortex security suite, aiming to add AI-driven analysis, prioritization, and autonomous actions for more self-directing security operations. The deal expands Palo Alto's in-house AI technology stack, moving beyond earlier partnerships and integrations tied to its autonomous security roadmap. Console's AI-native capabilities will plug into Palo Alto's broad enterprise footprint across the Americas, Europe, the Middle East, Africa, Asia Pacific, and Japan. The acquisition supports the company's narrative of AI-powered integrated platforms capturing larger cybersecurity budgets as customers consolidate tools, with platformized clients showing 120% net retention and near-zero churn. However, analysts flag execution risks around integrations, as folding Console into Cortex adds complexity in a competitive field where CrowdStrike and Zscaler also pursue tightly integrated platforms.
Palo Alto Networks Beats Q4 Estimates with Strong Revenue Growth
Palo Alto Networks reported fiscal fourth-quarter revenue of $3.41 billion, up 34.5% year over year, and EPS of $1.02, beating the Zacks Consensus Estimate of $3.35 billion and $0.98, respectively. The company's remaining performance obligation reached $21.20 billion, surpassing the $20.96 billion analyst average. Product revenue rose 28.6% to $738 million, while subscription and support revenue grew 36.2% to $2.67 billion, with subscription revenue up 39.9% to $1.84 billion. Shares have gained 10.1% over the past month, and the stock holds a Zacks Rank #2 (Buy).
In after-hours trading, Dell Technologies shares jumped nearly 9% after beating expectations on both lines and lifting its fiscal 2027 forecast, citing strength in its artificial intelligence service business. MongoDB shares dropped 12% despite posting better-than-expected earnings and upbeat guidance, with earnings of $1.90 per share on $772 million in revenue versus analyst forecasts of $1.61 and $734 million. Credo Technology shares slid almost 4% after its non-GAAP gross margin for the first quarter came in at 68%, slightly below the 68.3% analysts expected, though it beat on both lines. GitLab shares rallied nearly 20% on an earnings beat and upbeat full-year guidance, earning 24 cents per share on $286 million in revenue versus estimates of 18 cents and $273 million. Palo Alto Networks shares were flat after a better-than-expected fourth fiscal quarter, with earnings of $1.02 per share on $3.41 billion in revenue versus expectations of 98 cents and $3.35 billion.
Wall Street closed sharply lower on Tuesday, with the Dow, S&P 500, and Nasdaq each falling about 0.7% to 1% as Treasury yields climbed amid renewed Middle East tensions. In after-hours trading, several tech stocks rallied on earnings. Dell Technologies surged over 10% after reporting a double beat on second-quarter revenue and profit, with non-GAAP EPS of $7.04 beating by $2.12 and revenue of $46.97 billion beating by $2.47 billion. Palo Alto Networks edged up 3% after releasing its fourth-quarter fiscal 2026 results, posting adjusted EPS of $1.02 versus the $0.98 consensus estimate, and also announced the acquisition of Console for agentic AI. GitLab swung higher after topping second-quarter expectations and issuing strong guidance, with record gross bookings.
John Ternus begins his first day as Apple CEO on Tuesday, succeeding Tim Cook after 15 years, with AI as a top priority and a product pipeline including Apple's first foldable iPhone and a major Siri rollout expected in September. Dell and Palo Alto Networks report quarterly earnings after the market close, with Dell expected to continue momentum in AI and traditional enterprise businesses while managing tight memory supplies and higher component costs, and Palo Alto Networks following solid results from Crowdstrike and Okta that indicate healthy demand for cybersecurity. Additionally, the July Job Openings and Labor Turnover Survey is due, with economists forecasting job openings to ease slightly to 7.31 million.
Palo Alto Networks Faces High Bar After CrowdStrike's Record Quarter
Palo Alto Networks reports fiscal fourth-quarter results Tuesday after the close, with the bar raised by CrowdStrike's best-ever quarter of 26% revenue growth to $1.47 billion and a raised full-year forecast of roughly $6 billion. Palo Alto shares have surged 101.73% year to date to $371.59, and options traders expect an approximately 8.5% earnings move. The company has beaten estimates in six straight quarters but averaged a -3.73% day-of stock drop, with the last three quarters producing day-of reactions of -7.42%, -6.82%, and -5.64%. Management guided fourth-quarter revenue to $3.345 billion to $3.355 billion, next-generation security ARR to $8.9 billion to $8.95 billion, and non-GAAP EPS to 96 to 98 cents. Analyst consensus targets the stock at $362.71, below its current price, signaling the sell side has not chased the rally.
CrowdStrike Holdings reported its best quarter in history, with fiscal second-quarter revenue reaching $1.47 billion, up 26% year over year, and adjusted earnings of 31 cents per share, beating Wall Street's estimate of 29 cents. The company added a record $332.8 million in new annual recurring revenue, a 51% jump, and raised its full-year revenue forecast to between $5.99 billion and $6.01 billion. Shares surged 20.5% on Thursday, lifting rivals like Palo Alto Networks, which gained nearly 13%, and Okta, which jumped over 28%. Analysts from Needham, Morgan Stanley, and Goldman Sachs raised their price targets, citing AI-driven demand for security as customers rebuild their stacks amid the 'Mythos moment' and agentic AI threats. CrowdStrike's Falcon Flex subscription bundle saw ARR surpass $2.29 billion, more than doubling from a year ago, with 935 new accounts added in the quarter.
Palo Alto Networks Signs Multi-Year AI Security Partnership with NTT DATA
Palo Alto Networks has announced a multi-year global partnership with NTT DATA to support secure AI adoption for large enterprises, marking its first multi-year arrangement with a global systems integrator. The agreement includes co-engineering and early access to platform updates, and the company has also expanded its integration with Zero Networks to combine AI-driven threat detection with AI-enabled microsegmentation and hybrid infrastructure protection. These alliances aim to strengthen Palo Alto Networks' AI cybersecurity offering across critical industries, reinforcing its platformization strategy and supporting future margin expansion and earnings growth.
Palo Alto Networks Stock Jumps on Acquisition Rumors
Palo Alto Networks stock jumped 11.1% on Thursday amid rumors the cybersecurity firm is shifting into acquisition mode. After failed attempts to acquire Okta and Datadog, Palo Alto is reportedly circling two new targets: Cribl and ClickHouse. Cribl has $200 million in annual recurring revenue growing at 70% and is valued at $3.5 billion, while ClickHouse has over $250 million in ARR and a $15 billion private market value. Of the two, Cribl is the only one trading below Palo Alto's own 23.6x price-to-sales ratio, making it a potential bargain.
Cisco Expands Secure AI Factory with NVIDIA to Counter Palo Alto and Fortinet
Cisco Systems is expanding its Secure AI Factory with NVIDIA, embedding security directly into the AI infrastructure stack to counter rivals Palo Alto Networks and Fortinet. The architecture combines Cisco networking, NVIDIA AI infrastructure, and Supermicro rack-scale compute, with security built from silicon through applications and AI agents. Cisco's security revenues rose 14% year over year to $2.23 billion in the fourth quarter of fiscal 2026, and firewall orders grew over 30%. The company added more than 6,400 net new customers for products like Secure Access, XDR, Hypershield, and AI Defense since launch. Fortinet's SASE Firewall business grew 34% to over $2 billion in the second quarter of 2026, while Palo Alto's Prisma AIRS surpassed 300 customers in the third quarter of fiscal 2026. Cisco shares are up 44.2% year to date, and the Zacks Consensus Estimate for fiscal 2027 earnings is $5.11 per share, up 7% over the past 30 days.
Palo Alto CEO Held Talks with Okta and Datadog Before CyberArk Deal
Palo Alto Networks CEO Nikesh Arora held acquisition talks with both Okta and Datadog before landing a $25 billion deal for CyberArk, and is now circling Cribl and ClickHouse as his next targets, The Information reported on Wednesday. Between late 2024 and early 2025, Arora met with Okta CEO Todd McKinnon, and discussions progressed to product complementarity but stalled over price disagreements. Okta, valued at roughly $13.5 billion at the start of last year, has since climbed around 30% to a market cap near $23 billion. In spring 2025, Arora approached Datadog CEO Olivier Pomel with a hypothetical acquisition when Datadog was valued at more than $40 billion, but Pomel was not receptive and no formal offer was made; Datadog's market cap has since roughly doubled to more than $80 billion. With both paths closed, Arora executed fallback moves: Palo Alto agreed in July 2025 to acquire CyberArk, and in January 2026 paid $3.35 billion for Chronosphere, a smaller Datadog rival. Together, those two acquisitions contributed $338 million of the $3 billion in revenue Palo Alto generated in the April quarter. Arora's accelerating dealmaking reflects a conviction that AI is fundamentally changing the threat landscape, with AI agents capable of executing cyberattacks humans never could, making continuous monitoring a boardroom priority.
Cloudflare's Workers Platform Drives Growth with 7.4 Million Developers
Cloudflare's Workers developer platform is becoming a key growth engine, with the company reporting over 7.4 million developers on the platform by the end of the second quarter of 2026, adding nearly two million in that quarter alone—more than the 1.5 million added during all of 2025. The platform is gaining traction among enterprise customers, with more including Workers in pool-of-funds contracts; for instance, an APAC technology company signed a $4 million Workers contract after an $8.7 million Application Services deal, and another signed a $6 million contract for AI agent capabilities. Cloudflare says Workers has moved beyond adoption to meaningfully contribute to revenues, driving consumption alongside security and networking products. The rise of AI agents could further boost the platform, with Zacks Consensus Estimates projecting 32.3% and 28.5% year-over-year revenue growth for 2026 and 2027, respectively. However, Cloudflare faces tough competition from Palo Alto Networks, whose SASE segment grew 40% year over year in fiscal Q3 2026, and Zscaler, which ended its fiscal Q3 with over 700 Zero Trust Everywhere enterprises, up from 550. Cloudflare's stock is up 40.7% year-to-date, trading at a forward price-to-sales ratio of 28.87 versus the industry's 3.91, and carries a Zacks Rank #3 (Hold).
Baird Strategist Sees Software and Cybersecurity Leading Next Tech Phase
Baird tech strategist Ted Mortonson forecasts that hyperscaler capital expenditures will reach about $800 billion this year and could hit $1.1 trillion by 2027, driven by demand outstripping supply in compute and early-stage agentic adoption in enterprises. He notes that while semiconductor stocks have surged 61% and software indices are flat, the software sector is seeing short covering and institutional interest in system-of-record names. The security industry has been transformed by the introduction of Mythos, boosting names like Cloudflare, Crowdstrike, and Palo Alto, though these stocks now trade at nearly 30 times enterprise value to revenue, with some insider selling on the periphery. Mortonson cautions that changes in security architecture show up in pipeline rather than annual recurring revenue, and the street may not yet grasp how quickly that pipeline converts to orders.
Palo Alto Networks Network Security Growth Accelerates on AI Demand
Palo Alto Networks reported its Network Security business had its strongest quarter in several years during the third quarter of fiscal 2026, driven by rising enterprise spending on AI and cloud infrastructure. Next-generation firewall bookings grew nearly 40% year over year, supported by Gen 5 appliances and AI data center buildouts, while software firewall ARR increased 25% year over year. Network Security accounts for about 70% of total revenues, and hardware revenues, about 10% of total, had their best quarter in a decade with a record backlog. Management expects data center expansion and higher traffic volumes to remain key growth drivers for the next several quarters and potentially several years. Competitors CrowdStrike and Zscaler are also benefiting from AI-related cybersecurity demand, with CrowdStrike's AIDR solution seeing ending ARR grow more than 250% sequentially and Zscaler surpassing 700 Zero Trust Everywhere enterprises.
Palo Alto Networks announced a multi-year global alliance with NTT DATA to support secure AI transformation for enterprises worldwide. The company also reported an expanded integration with Zero Networks targeting zero-touch containment and AI-focused security controls, and introduced the Frontier AI Critical Defense Program aimed at protecting critical infrastructure through proactive network-level AI safeguards. These moves show how AI-focused cybersecurity is broadening across infrastructure providers. A key anchor is the joint US$1 billion business target that NTT DATA and Palo Alto Networks are aiming to generate by 2029.
Zero Networks Expands Palo Alto Networks Integration for Zero-Touch Containment
Zero Networks announced a major expansion of its integration with Palo Alto Networks, extending their joint solution from automated microsegmentation and firewall policy orchestration to zero-touch containment and AI security. The expanded integration enables customers to use Zero Networks to identify and contain threats at the individual asset level, redirect selected traffic to Palo Alto Networks security services for deeper inspection, and manage enforcement through Strata Cloud Manager. It also brings together Zero Networks AI Segmentation and Prisma AIRS to govern AI agents and inspect AI traffic. Traffic redirection is available today for Linux environments, with Windows support planned. The expanded integration is available now.
Cybersecurity ETFs Gain as Top Holdings Post Robust Q2 Results
Cybersecurity ETFs are drawing investor attention after top holdings CrowdStrike, Palo Alto Networks, and Fortinet delivered robust second-quarter results. CrowdStrike reported a 26% year-over-year revenue increase to $1.19 billion and a 50.7% jump in adjusted earnings per share, while Palo Alto Networks posted 31% revenue growth to $3 billion and a 60% surge in Next-Generation Security ARR to $8.1 billion. Fortinet crushed estimates with quarterly revenues of $2.05 billion, up 26% year over year, and received a Moody's upgrade to A3, the highest rating of any public cybersecurity company. The Nasdaq CTA Cybersecurity Index has soared 36.5% year to date, outperforming the broader Nasdaq Index's 13% return. Four ETFs highlighted include First Trust NASDAQ Cybersecurity ETF CIBR, Amplify Cybersecurity ETF HACK, Global X Cybersecurity ETF BUG, and iShares Cybersecurity and Tech ETF IHAK, with year-to-date gains ranging from 36.4% to 43.5%.
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