10 AI Stocks Investors Are Watching Today

7. Palo Alto Networks, Inc. (NASDAQ:PANW)

Number of Hedge Fund Holders: 64

Palo Alto Networks, Inc. (NASDAQ:PANW) is a leader in AI-powered cybersecurity. The company announced its fiscal third quarter 2025 financial results on May 20, 2025. The AI-powered cybersecurity vendor reported a 15% year-over-year increase in revenue, reaching $2.3 billion and just beating the analyst estimate of $2.28 billion. The GAAP diluted earnings per share (EPS) were $0.37, exceeding the estimated EPS of $0.35.

According to CFO Dipak Golechha, Palo Alto’s Q2 results were driven by the success of its platformization strategy, a strategy that involves developing a central platform that integrates multiple products and services for a smooth customer experience. Providing guidance for the fiscal fourth quarter 2025, the company anticipates revenue between $2.49 billion and $2.51 billion, as well as a diluted non-GAAP net income per share in the range of $0.87 to $0.89.

On the same day, analyst Shrenik Kothari from Robert W. Baird maintained a “Buy” rating on the stock with a $230.00 price target. The rating update follows Palo Alto’s strong financial performance in fiscal third quarter 2025, demonstrating robust demand and a strong customer base.

Palo Alto delivered a solid increase in its Next-Generation Security Annual Recurring Revenue (NGS ARR), growing 34% year-over-year. Meanwhile, it’s Remaining Performance Obligations (RPO) increased by an estimated 19% year-over-year.

The company’s product revenue also demonstrated inspiring performance, surpassing consensus expectations by about 7 percentage points. Palo Alto also raised the lower end of its fiscal year 2025 revenue guidance, implying optimism in terms of a continued growth trajectory.

While it is true that a softer service line performance has led to a minor stock price decline, the positive developments highlighted have led the firm to maintain its optimistic outlook.