Analysts Bullish on Palo Alto Networks Stock But Crucial Risks Persist

Palo Alto Networks (NASDAQ: PANW ) stock has soared by 90% this year, reaching a record high, and boosting its market capitalization to over $283 billion.

It has jumped by 150% from its lowest point this year, with some analysts seeing more upside.

Palo Alto Networks Soaring Amid AI Demand PANW, the biggest cybersecurity company in the world, is doing well this year, helped by the expected surge in demand as artificial intelligence growth accelerates.

It also soared after the company acquired CyberArk in a $25 billion deal that will help it gain more access in the human, machine, and agentic AI industries.

Despite the strong surge, some analysts believe that the stock has more upside to go in the near term.

Andrew DeGasperi, a top analyst from BNP Paribas, boosted his outlook from $330 to $380, while Wells Fargo’s Michael Turin hiked from $325 to $420.

Arete Research hiked the target to $433, while BTIG boosted to $380.

Read Also: MSTR Stock Stages Relief Rally as Peter Schiff Calls Out Michael Saylor The general view is that the ongoing surge in AI agents’ use will lead to a significant increase in cybersecurity spending.

That’s because these agents will introduce new attack surfaces and amplify the consequences of security failures.

These agents will have access to company databases, send emails, execute code, and make payment.

Compromising one AI agent will make it easy for attackers to have access to highly confidential information.

Analysts expect the company to experience double-digit growth in the long term, partly because of its Cyber Ark buyout.

The average estimate is that its annual revenue will rise 23.87% this year, followed by 20.7% next year.

If this is correct, it will make $11.42 billion and $13.8 billion in this period.

PANW Stock Faces Two Key Risks The ongoing surge has led to key risks.

One of them is that its stock has become highly overvalued, with its forward PE ratio being 92, higher than the sector median of 24.60.

It is also higher than the five-year average of 54.

Another risk is that its revenue growth is partly because of the CyberArk buyout.

In the last quarter, its revenue rose by 31% to $3 billion, with CyberArk contributing $388 million.

Palo Alto Networks chart | Source: TradingView Technicals also suggest that the stock has become highly overbought, with the Relative Strength Index (RSI) rising to 78.45 and the two lines of the Stochastic Oscillator moving above 88.

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