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Investment Thesis
In my last article on Palo Alto Networks (NASDAQ:PANW), published in February 2025, I previewed the company's Q2 earnings results and discussed the key factors that investors need to watch out for in
Palo Alto Networks: NGS Offerings To Be Boosted By Moves In AI Space
Summary
- I am upgrading Palo Alto Networks from Hold to Buy, citing strong Q3 results, robust guidance, and a promising AI cybersecurity strategy.
- NGS ARR surpassed $5B, driven by rapid adoption of AI-powered products like XSIAM.
- The Protect AI acquisition and platformization strategy should accelerate growth and help achieve the $15B ARR target by 2030.
- Despite macro risks, valuation offers 27% upside, and PANW is well-positioned to benefit from the ongoing AI-driven cybersecurity demand.
An independent investor in the Indian and US equity markets with a CFA Charter and a PhD in Finance from University of Durham, U.K. I hold an Honorary Associate Professor in Finance and Corporate Governance title at Brunel University London. I have a YouTube and a Podcast channel, titled The Stock Doctor,' where I discuss my views on the US and Indian markets every week. In addition, I actively undertake quantitative research in the areas of US equities, Behavioural Finance, Corporate Governance, Activist Hedge Funds, Cryptocurrencies and M&A , and have published in top-ranked peer-reviewed journals.
Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in PANW over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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