Wedbush Securities has added Palo Alto Networks Inc (NYSE:PANW, ETR:5AP) to its Best Ideas List, pointing to growing confidence in the cybersecurity company’s platformization strategy and its potential to benefit from increased enterprise adoption of artificial intelligence.
Wedbush reiterated its ‘Outperform rating on the stock and set a 12-month price target of $225, compared with Palo Alto Networks’ closing price of about $196 on Friday.
The firm highlighted the company’s recent acquisition of CyberArk as a game changer and “the right move at the right time.”
The analysts noted that while shares saw an “oversold drawdown” tied to the transaction, they continue to view Palo Alto Networks as “one of our favorite cyber security names to own over the next 12 to 18 months” and consider the current level “a golden buying opportunity.”
According to Wedbush, Palo Alto’s latest fiscal fourth-quarter results beat expectations on both revenue and earnings, with particular strength in next-generation security annual recurring revenue (NGS ARR) and remaining performance obligations (RPO).
The company recorded about 150 new platformization deals during the quarter, up 40% year-over-year. Wedbush said these larger bundled deals are helping lift ARR per customer, supported by momentum in secure access service edge (SASE), XSIAM, and AI-driven solutions.
The firm wrote that AI-linked products were a standout, with AI ARR more than doubling from the prior year.
“We expect to see further strength in PANW NGS ARR heading into fiscal year 2026 across SASE, XSIAM, and AI product suite, which continue to generate further traction/scale through its platformization approach,” analysts said.
Wedbush added that it sees fiscal 2026 as an inflection point for the company.
“We strongly believe the platformization approach is the right move for PANW as cybersecurity is a clear 2nd/3rd derivative play in the AI Revolution, leading to PANW ultimately emerging in the driver’s seat to gain market/mind share,” the analysts wrote.
The note also placed Palo Alto alongside Zscaler and CrowdStrike as expected beneficiaries of rising AI adoption in enterprise IT.