Palo Alto Networks (PANW) Stock Has Doubled. Here’s Why Bulls Think There’s More to Come

TLDR

• PANW stock is up ~113% over the past three months, driven by AI-related cybersecurity demand
• Capital One analyst Connor Murphy upgraded PANW to overweight, raising his price target to $421 from $307
• Tigress Financial’s Ivan Feinseth raised his 12-month target to $430 from $245
• Q3 revenue rose 31% year-over-year to $3 billion, with NGS ARR up 60% to $8.13 billion
• Wall Street holds a “Strong Buy” consensus rating on PANW

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Palo Alto Networks (PANW) stock has surged roughly 113% over the past three months, putting it among the strongest performers in the cybersecurity sector. CrowdStrike (CRWD) has posted a similar run, as investors pile into cybersecurity names.

Palo Alto Networks, Inc., PANW

The stock currently sits in focus after Capital One analyst Connor Murphy upgraded PANW to overweight from equal weight on Thursday, lifting his price target to $421 from $307. Murphy pointed to data-center buildouts, budget shifts toward cybersecurity, and the federal government’s push to strengthen its cyber defenses.

Murphy also upgraded Okta (OKTA) to overweight, raising his target to $171 from $126, and is expecting a “solid beat” from Okta when it reports in August.

IBM’s CEO Arvind Krishna added fuel to the sector this week, telling shareholders that customers had been “distracted” by “rapidly evolving, industrywide cybersecurity concerns.” Citizens analyst Rustam Kanga said that commentary gave a broad lift to cybersecurity stocks.

Tigress Financial Partners analyst Ivan Feinseth also got more bullish, reiterating his buy rating and raising his 12-month target to $430 from $245. He described Palo Alto’s platform as an “AI-driven, unified platform” combining network, cloud, security operations, and identity into a single architecture.

Feinseth pointed to Palo Alto’s February acquisition of Israeli identity-security platform CyberArk as making identity security a “core pillar” of the company’s software stack.

Revenue Growth Stays Strong

Third-quarter revenue climbed 31% year-over-year to $3 billion. NGS ARR grew 60% to $8.13 billion, with roughly $1.63 billion attributed to acquisitions including CyberArk and Chronosphere. Core organic growth remained solid.

The company added 110 new platformized customers in the quarter, bringing the total to around 2,280. Net revenue retention for these customers stands at 120%, with single-digit churn. Management is targeting more than 4,000 platformized customers by fiscal 2030 and $20 billion in NGS ARR.

Network Security, which makes up about 70% of revenue, had one of its strongest quarters in years. SASE ARR rose 40% to $1.6 billion, while net new SASE ARR expanded nearly 50%. Hardware, just 10% of revenue, saw firewall bookings jump roughly 40%.

AI Spending Opens New Doors

Palo Alto’s Prisma AIRS, its AI security platform, is its fastest-growing product. As companies move from AI pilots to full-scale deployments, cybersecurity needs are growing more complex. That’s opening spending opportunities beyond traditional endpoint and network security.

Total remaining performance obligations (RPO) rose 36% year-over-year to $18.4 billion, up 22% even excluding acquisitions. Current RPO growth accelerated to 17% from 15% in the prior quarter.

For Q4 fiscal 2026, Palo Alto guided for revenue of roughly $3.35 billion, about 32% year-over-year growth. NGS ARR is expected between $8.9 billion and $8.95 billion, up 59% to 60%. Wall Street’s consensus remains a “Strong Buy.”