Behind No.1 Cybersecurity Company: Why Is PANW Pelosi’s Pick?
$Palo Alto Networks(PANW)$ released its earnings report and lost 5%, with both EPS and revenue beating expectations.
However, gross margin came in at 72.94%, missing estimates by 5.55%.
RPO (Remaining Performance Obligations) also slightly missed by 0.86%, and subscription revenue came in 1.02% below expectations.
The market believes that RPO data suggests slowing short-term growth. In addition, the company’s guidance for next-quarter Next-Generation Security ARR slightly missed estimates, projected at $5.52–$5.57 billion compared to expectations of $5.57 billion.
Still, the company maintained full-year guidance above market expectations, easing investor concerns. Following the earnings release, Baird and RBC Capital Markets both rated the stock ‘Outperform’, with price targets of $230 and $232, respectively.
1. Why Is PANW Pelosi’s Pick? From Hardware to SaaS Giant
Palo Alto is the first cybersecurity company in history to surpass $100 billion in market cap, and it has drawn investor attention not just for its performance — but because Nancy Pelosi holds shares in the company.
In June 2018, Nikesh Arora was appointed as CEO of Palo Alto Networks. At the time, the company, known for its on-premise firewalls, had a market cap of around $18 billion, on par with rival $Check Point(CHKP)$. Today, Check Point’s market cap stands at $23.9 billion, while PANW is worth $128.8 billion — over five times more.
2. Aggressive M&A + Platformizations: How PANW Pulled Ahead?
Under Nikesh’s leadership, Palo Alto has conducted around 20 acquisitions, becoming one of the most active buyers in the cybersecurity space.
It has built a platform integrating 20+ product categories. Before Nikesh joined, Palo Alto was positioned in just 2 Gartner Magic Quadrants as a leader. After his first term, PANW is now in over 20 Magic Quadrants — proving its leadership in multiple areas of cybersecurity.
In this industry, most enterprise customers lack the expertise to evaluate dozens of security products, so research firms like Gartner wield immense influence in shaping purchasing decisions.
3. Platformizations and Free Services Drag Short-Term Profits?
Nikesh’s plan involves offering customers a 2–3 year cybersecurity integration and platform migration roadmap, giving free access to Palo Alto’s platform until existing contracts with other vendors expire. This strategy means customers can start using Palo Alto’s platform now without paying — still paying legacy vendors until their contracts end.
The risk: Palo Alto must absorb short-term financial hits, with slower revenue and billing growth. If customers only trial the platform but don’t convert, or fear vendor lock-in, the gamble may backfire.
Add to that the significant billing gaps from U.S. federal government contracts, Palo Alto’s biggest revenue source.
Still, the company maintains 30–35%+ targets for free cash flow and operating margins, showing confidence in long-term gains.
4. Looking Ahead: Nikesh’s Next “10x” Goal for Palo Alto?
One of Nikesh’s greatest achievements in his first term was quietly transforming Palo Alto from a hardware firm to a SaaS business, with over 50% of revenue now ARR. His next target: 90% of revenue as ARR in his second term.
“In the next decade, we’ll see a standard security platform that simply serves customers, who no longer need to integrate products from multiple vendors to build their own.”
Beyond consolidation, Palo Alto is also solving security problems point products can’t fix.
Real-time security is at the heart of this platform strategy — enabling real-time operations and protection.
“Today, the average time to remediate a security incident is four to six days — that’s unacceptable. We must reduce that to minutes — near real-time.”
5. Conclusion
Palo Alto became the first cybersecurity company to hit a $100 billion market cap by end of 2023, also the year it turned profitable. From 2021 to 2023, PANW maintained 20%+ growth, but clearly, that rate has fallen back to 14% in 2024 and 2025 projections.
The transition from hardware vendor to full-spectrum cybersecurity service provider was executed with almost flawless strategy, bold M&A, and efficient product integration.
But just as they start to catch their breath, the AI boom and rising competition bring new waves of disruption. There’s no time to rest.
What Do You Think?
Do you have confidence in Nikesh’s second term as CEO?
Can Palo Alto’s platform strategy and real-time security model succeed?
Do you believe in PANW’s aggressive M&A as a winning strategy?
Will you buy Palo Alto following Pelosi?
Post directly in the topic: PANW Growth Slowdown? Can SNOW and INTU Beat Earnings? or leave your comments on this post to win tiger coins~
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是啊，为什么不...只要他能把公司推向更高的高度...[Sly][Sly][Sly]
在Nikesh的领导下，Palo Alto进行了约20项收购，成为最活跃的买家在网络安全领域。
它建立了一个整合20+产品类别的平台.在Nikesh加入之前，Palo Alto的定位只是2个Gartner魔力象限作为一个领导者。在他的第一个任期结束后，PANW现在在超过20个魔力象限-证明其在网络安全多个领域的领导地位。
您对Nikesh的第二个CEO任期有信心吗？
Palo Alto的平台战略和实时安全模式能否成功？
您认为PANW积极的并购是一种制胜策略吗？
你会追随佩洛西购买帕洛阿尔托吗？
在本帖留言赢虎币~
I believe Nikesh Arora's leadership has been instrumental in Palo Alto Networks' $Palo Alto Networks(PANW)$
That said, the market's concern around growth deceleration is valid. Slowing RPO and subscription revenue growth indicate that the conversion from free trial users to paying customers may be taking longer than expected. Still, PANW maintaining full-year guidance and strong free cash flow targets gives me confidence that this is a temporary dip rather than a long-term issue. Nikesh's long-term goal of driving ARR to 90% reflects a clear and ambitious vision that aligns with industry shifts toward integrated security platforms.
While I don't blindly follow politicians' stock picks, Pelosi's stake does add a layer of attention. Ultimately, I'd consider buying PANW not because of her involvement, but due to the strength of the company's fundamentals, leadership, and future roadmap. If the stock dips further on earnings-related concerns despite solid long-term positioning, it could present a buying opportunity for long-term investors like me.
@Tiger_SG @Tiger_comments @TigerStars