Palo Alto Networks Slips 4% on Soft Q3 Outlook Despite Strong AI-Driven Demand
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Palo Alto Networks (NASDAQ:PANW) saw its shares drop over 4% intra-day today after issuing a weaker-than-expected income forecast for the current quarter, overshadowing its solid second-quarter performance.
For its fiscal third quarter, the cybersecurity firm projects adjusted earnings per share of $0.76 to $0.77, falling just short of analyst expectations of $0.78. Revenue is expected to grow 14% to 15% year-over-year, reaching $2.26 billion to $2.29 billion, aligning with consensus estimates at the midpoint.
In Q2, Palo Alto reported revenue of $2.26 billion, slightly beating the $2.24 billion forecast, marking a 14% increase from the prior year. Adjusted EPS came in at $0.81, narrowly missing the $0.82 consensus.
CEO Nikesh Arora attributed the company’s growth to heightened demand for cybersecurity solutions, fueled by the increasing adoption of artificial intelligence and a rise in cyber threats. Palo Alto’s "platformization" strategy, which encourages businesses to consolidate security tools into a single system, has also been a key growth driver.
Despite the strong momentum in AI-driven security demand, investors reacted negatively to the slightly weaker Q3 guidance, leading to a stock decline.
About alo Alto Networks, Inc.
Research $PANW- Location
- Santa Clara, US
- Sector / Industry
- Technology
Software—Infrastructure - Price
- $182.32
- Market Cap.
- $120.71 B
- Volume
- 8.5 M
- Company Description
- Palo Alto Networks, Inc. provides cybersecurity solutions worldwide. The company offers firewall appliances and software; Panorama, a security management solution for the control of firewall appliances and software deployed on an end-customer's network and instances in public or private cloud environments, as a virtual or a physical appliance;