2 September 2026
If you are covering Palo Alto's latest results, please see the following comment from Ben Barringer, head of technology research at Quilter Cheviot:
Palo Alto’s latest results were impressive across the board, with revenue growth accelerating to 34% and management once again raising guidance. The company is now forecasting around 24% revenue growth for the coming year, while revenues are expected to exceed $11 billion, underlining the strength of demand despite some pockets of pressure elsewhere in the technology sector. Investors have responded positively, with the shares rising strongly and up 102% YTD.
What is increasingly driving that demand is the changing nature of cyber threats. AI is making both attackers and defenders more effective, but the rise of agentic AI introduces a new layer of complexity. As businesses give AI systems greater permissions and autonomy, the potential consequences of vulnerabilities become much more significant. Cyber attacks that once took days to develop can now emerge in hours or even minutes, meaning organisations need security capabilities that can operate at the same pace.
The market opportunity remains substantial as businesses are still in the early stages of adopting AI at scale, and cybersecurity spending is becoming a prerequisite for that adoption rather than a separate consideration. Palo Alto’s technology, including AI-driven tools that help identify vulnerabilities before they can be exploited, leaves it well positioned to benefit from this trend.
The company has also been strengthening its position through acquisitions, broadening its platform at a time when customers increasingly want comprehensive security solutions from fewer providers. While the shares trade on a demanding valuation, investors appear comfortable paying a premium for a business that continues to execute strongly in a market with significant long-term growth potential. Management estimates its addressable market at over $300 billion, suggesting that despite its scale, the company remains relatively underpenetrated and well placed to benefit as cybersecurity and AI adoption become increasingly adopted.
