.png)
German (DE) 
English (US) 
Spanish (ES) 
French (FR) 
Hindi (IN) 
Italian (IT) 
Russian (RU) Anthony Di Pizio, The Motley Fool
Sat, May 24, 2025, 5:18 PM 6 min read
In This Article:
-
Palo Alto Networks is quickly becoming a leader in artificial intelligence (AI)-powered cybersecurity.
-
The company is forecasting nearly 200% growth in its AI revenue over the next five years, which could drive significant upside in its stock.
-
Palo Alto stock currently trades at a steep discount to its main rival, CrowdStrike, which might spell an opportunity for investors.
Palo Alto Networks (NASDAQ: PANW) is the world's biggest cybersecurity vendor, but it isn't resting on its success. The company continues to expand its portfolio of products and services, leaning on innovations like artificial intelligence (AI) to deliver the most advanced protection to date.
Palo Alto recently reported its financial results for its fiscal 2025 third quarter (ended April 30), and it delivered accelerated revenue growth thanks to a combination of its AI products, and a shift in its business strategy which is starting to pay off. Here's why investors with a spare $190 (money they don't need for immediate expenses) might want to buy a single share of Palo Alto and hold it for the long term.
Palo Alto offers dozens of cybersecurity products spread across three primary platforms: Cloud security, network security, and security operations. The company is weaving AI into as many of those products as possible to automate threat detection and incident response processes, because speed is everything when it comes to neutralizing a threat.
The Cortex XSIAM security operations solution is a shining example of this strategy. Human-led cybersecurity processes are no longer sufficient to deal with the growing volume of modern-day threats, so XSIAM allows large organizations to defer more of those workloads to AI and automation.
Around 60% of companies using XSIAM have reduced their median time to remediate (MTTR) incidents to under 10 minutes, from two or three days previously. That means fewer cyber threats are slipping through the cracks, which significantly reduces the risk of a major breach. During the fiscal 2025 third quarter, XSIAM's annual recurring revenue (ARR) surged by 200% year over year. The platform was launched just two and a half years ago, and it's already approaching $1 billion in bookings on a trailing 12-month basis.
But Palo Alto is also trying to protect businesses that are using AI. The company recently launched a new platform called Prisma AIRS, which secures sensitive data when it's plugged into AI models from third-party developers like OpenAI, and scans external AI applications for vulnerabilities to ensure they are safe to use. This is a new product segment for Palo Alto, but the company estimates it has an eye-popping $15 billion addressable market already.
Comments