Palo Alto Networks (PANW) Gains Momentum in AI Security and Observability

Palo Alto Networks, Inc. (NASDAQ:PANW) is one of the 14 AI Stocks Making Moves on Wall Street: Nvidia, Micron, and More.

Robust revenue/ ARR beats in its fiscal Q3 2026 results have recently led Wall Street to reaffirm its positive rating on Palo Alto Networks. On June 26, Cantor Fitzgerald analyst Jonathan Ruykhaver reiterated an Overweight rating and $340.00 price target on the stock.

Revenue beat consensus by 2.0%, above the 0.4% and 0.6% beats in the prior two April quarters; NGS ARR beat by 1.9%, up 1 point from last April quarter. Organic NNARR of $370M was a solid signal that platform momentum extends beyond inorganic contribution.

Besides the revenue beat and robust NNARR, the firm also highlighted strong momentum in the company’s AI-security and observability business. Prisma AIRS customers increased from the previous quarter to 300, with the company expected to surpass more than $100 million in ARR over the next two quarters.

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Chronosphere observability ARR also surpassed $300M, with much of this growth driven by a major AI frontier lab relationship that now exceeds $200M ARR.  Cantor noted that because the company has two of the top five major frontier AI labs as customers and a consumption-based billing model, observability ARR is likely to “be lumpier than the rest of NGS ARR.”

Palo Alto Networks, Inc. (NASDAQ:PANW) is a leading cybersecurity company that provides a range of products, including firewalls, malware protection, and cloud security.

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