Palo Alto Networks

PANW

Market cap $133B

The software sector has been a meaningful laggard this year, and Baird analysts say plenty of stocks are now on sale.

Palo Alto Networks is the world's largest cybersecurity vendor, and it has a growing portfolio of solutions designed to protect the entire enterprise. Palo Alto believes its addressable market will be worth $300 billion over the next three years, as artificial intelligence and quantum computing reshape the industry.

Artificial intelligence stocks are not overheating — they are just beginning to show their potential. That is the view of Wedbush Securities analyst Dan Ives, who says Wall Street bears are mistaking a rapid technological shift for exuberance.

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Editor's note: Any and all references to time frames longer than one trading day are for purposes of market context only, and not recommendations of any holding time frame. Daily rebalancing ETFs are not meant to be held unmonitored for long periods.

Palo Alto (PANW) has been one of the stocks most watched by Zacks.com users lately. So, it is worth exploring what lies ahead for the stock.

Investors often turn to recommendations made by Wall Street analysts before making a Buy, Sell, or Hold decision about a stock. While media reports about rating changes by these brokerage-firm employed (or sell-side) analysts often affect a stock's price, do they really matter?

Palo Alto Networks, Inc. continues to deliver strong cybersecurity leadership in the AI era, as evidenced by its Q1 FY 2026 beat and raise. However, a deeper dive into its fundamentals shows emerging cracks over the durability of the stock's growing valuation premium on both an intrinsic and relative basis. Despite clear AI tailwinds in identity and cloud-native security, bolstered by its upcoming M&A activity, PANW's current premium has yet to de-risk for imminent dilution and integration inefficiencies.

Palo Alto Networks continues to generate solid mid-teens revenue growth. It also announced another acquisition as it looks to be an industry consolidator.

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