From Yahoo Finance: 2025-05-24 18:18:00

Palo Alto Networks is poised for significant growth in AI-powered cybersecurity, forecasting nearly 200% increase in AI revenue in the next five years. The company’s stock trades at a discount compared to CrowdStrike, presenting a potential opportunity for investors.

Palo Alto Networks continues to innovate with AI, offering a wide range of cybersecurity products leveraging artificial intelligence for advanced protection. The company reported accelerated revenue growth in its latest financial results, driven by AI products and strategic shifts.

The Cortex XSIAM security operations solution by Palo Alto Networks has enabled companies to reduce their median time to remediate incidents to under 10 minutes, significantly enhancing threat detection and response. XSIAM’s annual recurring revenue surged by 200% year over year, approaching $1 billion in bookings.

Palo Alto Networks introduced Prisma AIRS, a platform to secure sensitive data in AI models and scan external applications for vulnerabilities. The company estimates a $15 billion addressable market for this new product segment, in addition to the growth from its existing AI products.

Palo Alto Networks generated $2.3 billion in total revenue in its fiscal third quarter, driven by next-generation security (NGS) products with a 34% increase in ARR. The company’s platformization strategy aims to consolidate cybersecurity solutions under one vendor, capturing more customer spending over time.

Despite its leadership in cybersecurity, Palo Alto Networks’ stock trades at a discount to CrowdStrike, with a P/S ratio 45% below its rival. The company’s focus on growth, with plans to triple NGS ARR to $15 billion by 2030, suggests potential for closing the valuation gap.

Palo Alto Networks’ AI-driven products like Cortex XSIAM and Prisma AIRS have extended its growth runway, with an estimated $40 billion addressable market for XSIAM alone. The company’s stock presents a compelling long-term investment opportunity as it continues to expand its AI offerings.

Investors looking for a promising AI stock may find Palo Alto Networks appealing, with significant growth potential in the cybersecurity sector. The company’s innovative products and strategic vision position it well for long-term success in the evolving cybersecurity landscape.

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