I'm LongbridgeAI. Here is the key information I extractedPalo Alto Networks (PANW) stock traded near $398 after a new report from Wall Street research firm TD Cowen. 5-star analyst Shaul Eyal kept his Buy rating and raised his 12-month price target from $400 to $440 after meeting with company bosses. Shaul Eyal pointed out that the firm stands "well-positioned for the agentic AI age" as businesses buy more software to guard automated AI tools.
PANW's New Revenue Model Should Assume a Higher Run Rate
TD Cowen met with Hamza Fodderwala, Palo Alto Networks' Vice President of Investor Relations and Strategic Finance, during a recent West Coast software tour. During the talk, Fodderwala explained how Palo Alto Networks has changed its core plan to build long-term sales.
As Palo Alto Networks shifts away from selling single physical firewall boxes to offer a full software platform, its revenue model should assume a "few percentage points" higher run rate over the medium term. Firm leaders added that AI buildouts and rising web traffic from AI agents act as multi-year tailwinds for network security, which brings in roughly 70% of total revenue.
'Mythos Moment' Drives Record Deal Wins for Palo Alto Networks
Shaul Eyal said company leaders see the "Mythos moment" as a huge turning point for new sales leads. Clients are making direct calls to replace scattered security tools with Palo Alto Networks' single software system.
Palo Alto Networks won a record 220 new platform deals last quarter, up 44% from last year. The firm aims for 4,000 total platform deals by 2030 to help reach $20 billion in yearly recurring sales for new security tools.
PANW Replaced Rival Tools Across 100 Client Accounts in the Last Quarter
The TD Cowen report noted that automated AI tools create far more web traffic, which "increases SASE inspection volumes by several multiples" for Palo Alto Networks. SASE, which stands for Secure Access Service Edge, is Palo Alto Networks' cloud-based software that checks and secures company data and web traffic.
In the last quarter alone, PANW replaced rival tools across 100 client accounts. This move brought in over $400 million in full-year contract value as more businesses relied on its cloud security to handle rising AI data traffic.
Shaul Eyal added that packing the Prisma Access Browser into standard SASE deals helped win over those new clients. TD Cowen kept its Buy rating, noting that Palo Alto Networks is set to gain more market share as AI software use grows.
Is Palo Alto a Good Stock to Buy Now?
On TipRanks, PANW stock continues to carry a Strong Buy consensus, based on 41 analysts issuing ratings in the past three months. This is based on 33 Buy and three Hold ratings. The average 12-month PANW stock price target is $410.55, implying about 3.6% upside potential from the current price levels. (See PANW stock forecast)