3 June 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 results show a business benefiting from being a AI loser to an AI winner. The market has moved from treating AI as a threat to security vendors, to recognising it as a catalyst for both attacks and defence, and Palo Alto is positioning itself on the right side of that shift.
The 31% revenue growth, alongside a 36% rise in backlog, points to sustained demand, but the more important detail is how much of that is genuinely organic. Strip out recent acquisitions and growth sits closer to 22%, which is still robust but less exceptional.
What is underpinning the story is the expectation that AI will materially increase both the speed and sophistication of cyber attacks. Tools like Anthropic’s Mythos highlight the scale of the risk, particularly in identifying vulnerabilities more quickly. That creates a structural tailwind for providers that can position themselves as trusted, end-to-end security platforms rather than point solutions.
The guidance upgrade and expectation of 34% growth into Q4 reinforces that confidence, and suggests management sees this as a multi-year cycle rather than a short-term spike. However, the slight share price weakness after hours reflects that strong demand is already priced in. With the stock up sharply since April, investors are now scrutinising the quality of growth as much as the level.
There is also some caution around strategy. Management signalling openness to further acquisitions may support capability in the long term, but it raises questions about integration risk and whether organic growth alone can sustain current valuations.
