Palo Alto Networks May Need a Breather Before Its Next Rally
Palo Alto Networks May Need a Breather Before Its Next Rally
https://www.fool.com/investing/2026/07/11/palo-alto-networks-may-need-a-breather-before-its/
Publish Date: 2026-07-11 06:37:00
Source Domain: www.fool.com
Cybersecurity has been important for years, but its significance is about to expand thanks to artificial intelligence. Every AI model, chatbot, and physical AI requires digital safeguards to deter hackers. Furthermore, hackers are using AI to penetrate more systems, creating the need for larger cybersecurity budgets.
This core thesis is part of the reason why Palo Alto Networks (PANW 3.67%) has surged by almost 80% year-to-date. While the pieces are coming together for sustained revenue growth, the current rally may be a bit overdone.
Image source: Getty Images.
Investors can already see the impact of AI
Palo Alto Networks’ fiscal 2026 third-quarter results pointed to meaningful revenue acceleration. Total sales increased by 31% year over year, compared to a 15% year-over-year increase in the previous quarter.
Today’s Change
(-3.67%) $-12.40
Current Price
$325.91
Key Data Points
Market Cap
$266BMarket cap calculated using publicly traded shares outstanding only. Does not include unlisted, private, or dual-class non-traded shares. Implied market cap may vary.
Day’s Range
$323.85 – $340.13
52wk Range
$139.57 – $368.17
Volume
4.7M
Avg Vol
8.1M
Gross Margin
71.05%
Recent acquisitions of CyberArk and Chronosphere contributed to elevated growth rates, but Palo Alto Networks’ underlying business still exhibited more growth than usual. Its annual recurring revenue (ARR) from next-generation security was up by 60% year over year. The total ARR reached $8.1 billion, with $1.6 billion of that coming from the acquisitions.
Guidance implied $3.35 billion in fiscal 2026 Q4 revenue, which would be an 11.7% sequential growth rate. Year-over-year growth rates are more attractive, but sequential growth rates factor in the recent acquisitions. Palo Alto Networks also expects to close out the year with up to $8.95 billion in ARR…
